Earlier this year, the United States and the European Union announced plans to enter into negotiations on a comprehensive trade and investment agreement. The Transatlantic Trade and Investment Partnership (T-TIP) is an ambitious attempt to bring together the two largest economies in the world to create new business and job growth opportunities. For agriculture, and rice in particular, major challenges have to be resolved before an agreement can adequately benefit the United States.
The EU has traditionally been a major export destination for U.S. rice, particularly long-grain varieties from the Mid-South. However, U.S. access is sharply constrained by EU import policies designed to protect the brown rice milling industry in northern Europe; to provide specific tariff concessions on rice from former EU colonies; and to provide duty free access to least developed countries. The current regimes severely distort the import market, raise serious questions about compliance with the EU’s obligations to the World Trade Organization, and are detrimental to U.S. export interests.
The USA Rice Federation, therefore, strongly supports and calls for full liberalization for all forms and types of U.S. rice. This means eliminating current tariffs over an established time period upon implementation of the agreement.
The most significant long-term obstacle for U.S. rice is the EU’s regulatory approval structure for plant products containing genetically modified (GM) traits. Following the unintended contamination of the commercial supply of U.S. long-grain rice in August 2006 with the LibertyLink 601 and 62 GM traits, U.S. rice exports to the EU plummeted. U.S. rice exports to the EU were nearly 322,000 metric tons (mt), valued at $95.4 million, in 2005-06 (August-July), before the impact of the LibertyLink contamination. Exports have remained below 100,000 mt annually since then with one exception. Exports in 2011-12 were the lowest since the contamination at 60,197 mt, valued at $47.4 million.
Despite the successful effort of the U.S. rice industry to effectively remove the LL traits from the commercial supply, trade has not returned and the lack of a functioning EU biotechnology regulatory approval process is responsible. The EU maintains a zero-tolerance regulatory policy towards the presence of unapproved GM traits in food and feed, and EU importers are unwilling to take the legal risk of large-scale imports of U.S. long-grain rice, notwithstanding the effective elimination of LL traits.
USA Rice urges the U.S. government to use the T-TIP to negotiate a functioning, science-based EU regulatory regime for biotechnology in general, and to press for adoption of an EU low-level presence policy (LLP) for foods that would include specifically the LL601 trait. Because of the effective non-existence of LL traits in the U.S. supply, such an LLP would remove the regulatory road block from re-establishing a market presence for U.S. long-grain rice in the EU.
As a 21st century agreement, the T-TIP has the potential to resolve longstanding issues across many agricultural industries. Free trade in all forms and types of rice between the United States and the EU and a regulatory solution that includes a low-level presence policy would allow the U.S. rice industry to regain its market share in the EU and compete on a more level playing field.