What’s App in Europe – October 2017

Glyphosate

The decision to authorise the continued use, in the EU, of the worlds most used herbicide, glyphosate, most commonly known by the Monsanto trade mark RoundUp must be made by the end of the year. If no decision is made the current authorisation lapses.

The EU’s general food regulation provides that the decisions on the health and safety of products must be made on the basis of science. The EU has established the European Food Safety Authority to look at safety for foods and the European Chemicals Agency to look at the toxicity of active substances. Both these bodies have found that glyphosate is not a health danger to humans. The UN’s FAO and the WHO are of the same opinion. So, the science is clear and in favour of a renewal of the licence. However, it is not that easy.

Another UN agency, the International Agency for Research on Cancer listed Glyphosate as possibly carcinogenic to humans. IARC is not some unrecognised university researcher trying to make a name. So, this is now the problem facing decision makers in Brussels. Should they follow the advice of the EU’s own scientific agencies or look to the IARC.

When there is doubt as to the science, the EU’s precautionary principle can come into play. The Precautionary principle allows regulators to take measures even where there is scientific doubt but on condition that further scientific work is done to resolve the scientific doubt. The decision can be made on a precautionary basis.

But precaution usually means banning or restricting a product. The decision facing the Council in Brussels is whether to agree with the Commission proposal to continue to allow the use of glyphosate. So, can a decision to allow still be a precautionary decision?

On the political side, it is clear that the farming industry wants renewal. There are even some low chemical input farmers that want to use it as it is the most effective. Railways want to use it to keep the tracks clear of weeds. Gardeners want to use it to keep their pathways clear. Civil groups and NGOs against multinationals and chemical agriculture are against. The Member States are split. And even individual Member States are split with different ministers taking opposing positions.

Brussels is famed for its ability to reach compromises. The decision on glyphosate will test the skills that have given rise to that fame.

Irradiation

Staying on the health and safety theme the EU Commission has launched a discussion document on the irradiation of food. The radiation of food by gamma or X-rays is a safe and effective way of killing bacteria such as salmonella, campylobacter and E.coli, bacteria that have a habit of attaching themselves to food and killing people who ingest them. In addition, irradiation delays the ripening of fruit and the sprouting of potatoes allowing for longer shelf life.

Currently the EU allows irradiation only for aromatic herbs, spices and vegetable seasonings and under strict conditions. Other countries have more liberal regimes allowing irradiation for a much wider range of foods. In addition, some Member States allow irradiation for products not authorised at the EU level.

So, what should the EU do? The discussion document launched by the Commission invites interested parties to make their views known. Interested parties have till the end of the year to comment. The problem is that there is a knee jerk view in the EU that irradiation turns foods into frankenfoods and that it is bad for humans. When the Commission started a similar process back in the early 2000 it had to shelve any plans it had to expand irradiation use due to the backlash against this technology. So, it is likely that most comments will be against the expanded use of irradiation on the basis of an irrational dislike of anything technical.

Science tells us that the controlled use of irradiation can achieve ends that otherwise require unacceptable levels of agrochemicals with the residues attached to them. Yet somehow consumers want the agrochemicals and not the clean alternative. It is a bit like diesel particles and CO2 emissions. To get the CO2 down, EU consumers were willing to breathe dirty particulate air. It took a scandal to wake people up to the reality.

Most European citizens consider the health and safety standards applicable in the EU are the highest in the world.  The fear of TTIP was that the trade agreement would undermine high EU standards by allowing low US standard products onto the market. In practice while the EU does have high standards there are some aspects that are not healthy at all. More is the pity.

China: Market Economy Status

For a number of years now China has been putting pressure on the EU to recognise it as a market economy. The difficulty for many EU Member States has been the clear evidence that China is a managed market with state owned enterprises controlling key industries like natural resources and capital and enterprises obliged to comply with five year plans. Despite all the evidence to the contrary, a number of Member States lead by the UK and the Scandinavians argued that China should be given the status. Other Member States lead by Italy and France have been arguing the other way.

The Commission, as often is the case, was in the middle and chose a compromise approach to get the EU out of the decisional dilemma. Rather than decide, the Commission simply proposed to remove the mechanism for classifying countries as market or non-market. In this way, no decision had to be made and China could not take umbrage either way.

The whole debate took place within the context of the EU’s anti-dumping regulation which allows the EU to counter unfair trade practices. Dumping happens when the price a producer charges in the export market is less than the price charged in the home market. If the home market is distorted because of government interference the price on that market cannot be reliable for measuring dumping. So, an alternative is needed.

Under new rules agreed by the Council, the Parliament and the Commission in early October the EU will determine, in the course of specific anti-dumping investigations, if the market of any third country is significantly distorted. If there is such a finding then the price to be imputed to that origin will be constructing using undistorted costs which can be found in undistorted economies at an equivalent level of economic development.

The new rules will enter into force around 20 December 2017.

Brexit and the WTO

We cannot report on what’s happening in Brussels without discussing Brexit. Everyone agrees the situation could not be more difficult. We would like to report on one small issue which shows just how complicated things can become.

Over the years that the UK has been a member of the EU, the EU has established a significant number of tariff rate quotas that ensure access to the EU market for limited volumes of agricultural products that would otherwise be excluded because of high tariffs. The EU has TRQs on garlic, on chickens, on wheat and many more. A number of important TRQs were opened when the UK joined the EU to preserve the possibility for Commonwealth countries to continue exporting butter and sugar after entry into the Common Agricultural Policy.

Now that the UK is leaving both the UK and the EU want to allocate these TRQs between them. The only success of the negotiations so far has been an agreement between the EU and the UK on the splitting up of TRQs. So far so good.

However, the TRQs form part of the EU’s WTO commitments. And those commitments have been negotiated with all the other WTO members. So, the EU cannot just unilaterally change. Or, if it wants to change unilaterally, there is always a cost. The EU and the UK are about to find out what that cost will be. It seems that rather than just accept what the UK and the EU are proposing a number of important agricultural exporting WTO members have written to the EU arguing that any change must not result in a diminution of trade or the terms of trade. That is not easy. TRQ access into a 500 million consumer market is not the same as access to a 440 million consumer market or a 60 million consumer market. Keeping the combined new EU and UK TRQs at the same level may not be possible.

The allocation of TRQs between the EU and the UK was considered to be one of the simplest tasks facing the negotiations. It was for the EU and the UK. The problem now is that not all other WTO members can agree on the outcome.

This article is for information purposes only and is not intended as a professional opinion.
For further information, please contact: Bernard O’Connor.