ATLANTA - While comprehensive global trade negotiations remain the ideal, regional trade deals are the next best option and can provide new opportunities to fruit and vegetable traders, trade experts at an Oct. 23 Produce Marketing Association Fresh Summit workshop said.
Craig Thorn, founder, DTB Associates, spoke at the session called "Beyond the Acronyms: Trade Agreements, Global Opportunities & You" and was joined by moderator Richard Owen, vice President of global development for PMA and panelists:
- Jose Antonio Gomez Bazan, CEO, Camposol Trading in Peru
- Gert Mulder, managing director, Fresh Produce Centre, Netherlands
- Christian Schlect, president, Northwest Horticultural Council and
- Keith Schneller, founder, eBridgeAsia.
Thorn said multilateral global negotiations - setting trade rules for the whole world - are the best way to accomplish trade policy. "The problem with (regional) trade deals is those that have to deal with the spaghetti bowl of different agreements," he said. But he said there is no other alternative, since the World Trade Organization broader talks have been stuck.
The U.S. and the European Union are more interested in seeing the end of the Doha Round of WTO negotiations after 15 years of work, he said.
"They are convinced the round can"t be concluded now and they believe it necessary to clear the decks and take a step back and look for another way forward," he said. "It is time to look for something else to find a new basis for negotiation."
Still, he said the existing decade-old WTO agreement on sanitary and phytosanitary issues for agriculture is a very important tool to preserve science-based rules of trade.
In the absence of progress on world-wide negotiations on agricultural trade, Thorn said regional trade deal are the next best alternative. "These (regional) trade deals can only be helpful," he said.
The European Union has negotiated 37 regional trade agreements with 92 countries, while the U.S. has negotiated 14 trade deals with 20 countries, followed by Canada with 10 trade deals with 13 countries.
He said regional trade deals such as the North American Free Trade Agreement have been positive for U.S. agricultural trade compared with U.S. trade trends with countries not belonging to trade pacts.
The recently completed Trans Pacific Partnership agreement includes 12 countries accounting for 40% of global gross domestic product and 25% of global trade. Other countries, including Korea, Taiwan, Thailand, Philippines, Costa Rica and China have expressed interest in joining in the future.
Tariff elimination for citrus in Japan, for example, is scheduled for an eight-year phase-out, with a four-year phase out in place for Vietnam and a three year phase out in Malaysia.
Thorn said the TPP is a good agreement and rejection by Congress would be a huge setback for U.S. trade policy.
However, he said there are agricultural tariff lines that are excluded, but those exceptions generally don"t involve fruits and vegetables. The full text of the agreement is not yet available but the document could be released fairly soon by all the countries at the same time.
Thorn said the Trans Atlantic Trade and Investment Partnership, now under negotiation, is a comprehensive agreement that will include agricultural tariffs and sanitary and phytosanitary measures.
Still, the European Union is likely to want to keep tariffs in place for sensitive commodities. Sanitary and phytosanitary issues may also be difficult to work through, Thorn said.
Gomez Bazan of Peru said the country is a party to the TPP but remains concerned about phytosanitary trade barriers it faces with various countries. He said Peru had to wait ten years before it could export avocados to the U.S. The agricultural export business in Peru has been growing about 15% to 20% per year for the past 15 years and the country has signed 12 trade agreements with 45 countries, he said.
Schlect said that U.S. Food Safety Modernization Act could present problems and create friction for U.S. trading partners. "The difference on trade is that most (food safety) enforcement in the past occurred at the border," he said. The new food safety regulations will impose new burden on both U.S. importers and growers in foreign countries to comply with the FDA rules. "There could be a lot of confusion and hard feelings."
Retaliation by China is possible if trade disruptions occur related to food safety regulations, Schneller said.
Responding to a question from the audience about listeria regulations in fresh produce, Schlect said while some countries have an allowed tolerance for the listeria pathogen, the U.S. does not. Schlect said it appears unlikely the FDA will change its position.