With both, the U.S. and the EU embrace similar ideologies such as their prioritization of democracy and the maintenance of a liberal economy, and often agree on how to respond to various international conflicts, one being the recent invasion of Ukraine. However, when discussing agricultural trade policy, reaching a consensus that meets both economies’ respective needs has proven difficult.
Background Information
Since its conception, the European Union has made it a priority to support farmers, with early EU budgets giving agriculture over 70% of allocated funding. In more recent budgetary breakdowns, the EU has lowered this number to 31% but the priority to protect small farmers is still present in its agricultural systems and policy. For example, in 2016 the EU had around 10.8 million farms with an average size of 47 acres, and the US had 2.1 million farms at an average size of 441 acres. This illustrates differing ideological approaches to agriculture, as the European Union prioritized small farmers while the United States focuses on factory farm agriculture.
The two economies also differ in attitudes towards food quality and production. Set to expire in 2023, the U.S. Agricultural Improvement Act of 2018—also referred to as The Farm Bill of 2018—increased oversight in agricultural production and addressed food security and climate issues related to the factory farm model. The 2018 Farm Bill provided $428 billion in funding for U.S. farmers over its five-year duration to incentivize responsible agricultural practices.
In 2020, the European Union announced their Farm to Fork Strategy which prioritizes freshness, fairness, and accessibility of food systems. The Farm to Fork Strategy aims to:
- Make food systems more sustainable.
- Combat the loss of biodiversity throughout the region.
- Help mitigate the effects of climate change.
- Protect the accessibility of healthy foods by combating price increases.
The EU also announced its willingness to support a global transition to similar models, which directly threatens the models in place in the United States. The Farm to Fork Strategy led to more restrictions on geographical indication labels. These labels provide an official indication of where certain products are produced in order to protect the tradition and history of certain regions’ cuisines and cultures. Much like the general aims of the Farm to Fork Strategy, there is no equivalent to the EU’s geographical indications labels in the United States, creating another point of conflict.
Recent Conflicts
In recent years, tensions rose when the U.S. enacted tariffs on steel and aluminum in 2018. Intended to protect US-based steel and aluminum producers, these tariffs taxed 25% on imports of steel and 10% on imports of aluminum. This import tariff, paired with a threat to tax foreign imports on cheese and champagne, led the French government to announce their intentions to limit trade with countries that did not meet EU agriculture standards, including the United States.
The relationship between the United States and the European Union faced another point of conflict with the Appellate Body crisis in 2019. The United States blocked the appointment of new judges to the World Trade Organization (WTO)’s Appellate Body. After two of the three remaining Appellate Body members’ terms expired, the Appellate Body lacked the quorum necessary to hear appeals, which in effect blocked the dispute settlement system, leading many to doubt the WTO’s role in enforcing multilateral trade rules. The U.S. objected to new appointments over concerns the WTO judges acted in a way that infringed on U.S. sovereignty.
Current Strategies
President Biden has begun to roll back many restrictions put in place by the previous administration. President Biden lifted the tariffs on steel and aluminum and established the U.S.-EU Trade and Technology Council (TTC). The TTC aims to demonstrate how a democratic and market-oriented approach to trade and technology can improve the prosperity and quality of life of both EU and U.S. citizens. Stated goals for the TTC include:
- To cooperate in development and production of new technologies to reflect shared democratic values, including the prioritization of human rights.
- To ensure that trade policies and the deployment of new technologies reflect and are informed by national security and scientific priorities as well as commercial and economic priorities.
- To encourage competitiveness within the transatlantic economy and ensure joint leadership in setting global norms for new technologies that are based on U.S.-EU shared democratic values.
- To retain leadership in STEM for the US and allies whilst fighting authoritarian influence in emerging and digital technology spaces.
Future Developments
The European Union and the United States have announced priorities for improving agro-food trade policy moving forward. These priorities include:
- Protecting geographical indications (GIs) for exported EU products.
- Ensuring that the EU standards for agriculture are adhered to and respected.
- Securing enhanced access to the U.S. market for products such as chocolate, diary, and processed meat products.
- Addressing barriers that limit U.S. firms’ access to the EU market by further liberalizing bilateral trade agreements and investment ties.
In an attempt to meet these goals, the EU and the U.S. have proposed a Transatlantic Trade and Investment Partnership (T-TIP). The T-TIP is a comprehensive trade and investment agreement meant to provide more transparency for both entities while maintaining high standards in health and safety. Through the T-TIP, both countries would experience a decrease in restrictive tariffs which would theoretically increase access to foreign goods as well as increase employment in both respective regions. However, many economists are concerned over the lack of transparency surrounding the agreement’s negotiations and fear that the minimal agricultural standards in the United States could negatively impact the economic prosperity of small EU farmers.
