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Transpacific Free Trade Agreement Could Cause Dairy 'Price War'

18 February 2014

EU/US – An EU-US free trade agreement, while promising for manufacturing, is of no help to dairy producers and could cause a price war, says the European Milk Board (EMB).

The EMB has issued a stark warning saying US and EU industries are ‘too different’ and that a Transatlantic Trade and Investment Partnership (TTIP) is of no benefit to farmers.

The Board’s concern is that TTIP will erode levies on dairy imports to the EU. The EMB said that the substantial levies allow it to flexibly manage supply in the EU milk market.

This is a problem pertinent to dairying. Most industrial product imports have no levy, the EMB explained.

Should Levies be reduced or erased, the EMB said: “The aim of cost-covering prices for milk producers in the EU would become remote.”

Furthermore, the EMB has concerns over smaller farms as more dairy products arrived on the EU market.

When completed, the EU-US TTIP will be the biggest bilateral trade deal ever negotiated, according to the European Commission.

This, the Commission says, will grow EU economic output by 0.5 per cent and improve member state output and employment. 

An independent study by the Centre for Economic Policy Research said the gains could worth €119 billion a year. For a family of four, this is €545 in disposable annual income.

On a world level, the report sees the TTIP lifting global GDP lifting by almost €100 billion.

But the EMB says US and EU sectors vary too much, both in terms of production and markets.

The examples given were farm structure, production constraints and use of hormones in the US. 

On the subject of growth hormones in meat and milk production, the EMB said: “With the conclusion of the free trade agreement the fear is that the governments will agree on the lowest standards, of advantage solely to the agricultural industry.

“This could compromise consumer protection in the EU, where it is based on the precautionary principle. The consequences of the resultant price war and the loss of trust among European consumers would be unforeseen for family farming in Europe.”

 

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