TTIP closer to fulfillment

| Foreign Markets |

As we have often mentioned on this blog, the European Union and the USA have been conducting negotiations about the Transatlantic Trade and Investment Partnership. TTIP is aimed at the creation of the largest free trade zone in the world, which could help boost economic growth and create new jobs on either side of the Atlantic Ocean.

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2015: threats and opportunities for the Polish fertilizer market

| Polish Market |

The Russian embargo on Polish food, the conflict between Russia and Ukraine, the European Climate Change Adaptation Conference – all those events in 2014 had their impact on the food and fertilizer market in Poland. They have necessitated changes, which Poland and rest of Europe need to face if the inhabitants of the Old Continents are to enjoy food security in the long term.

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Protests of German farmers

| Foreign Markets |

Opposition to the Transatlantic Trade and Investment Partnership between the USA and Europe, and demand to support environmentally-friendly agriculture were the two main reasons why 30,000 activists and farmers took to the streets of Berlin on January 18th, 2014.

No to GMO

The chief threats resulting from the transatlantic agreement, which is to be ratified by the government in Washington and the EU authorities in Brussels, include the risk of foodstuffs containing genetically modified organisms (GMO’s) flooding the European market. Farmers and activists from a hundred organizations working for the environment expressed their concern about the impact of American GMO’s on EU agriculture, animals, environment and the consumers of food products.

Postulates for the government

The protesters gathered in front of Chancellor Angela Merkel’s office to call for an improvement of the quality of the produced food, and for curbing the power of huge investors who control vast acreages of land. They argued in favor of supporting organic plantations and young farmers, as well as for renewed efforts to combat world hunger.

A strategic moment

The timing of the protests was deliberate, as one of the largest agricultural fairs were inaugurated shortly afterward, at the end of January. Also, on January 18th, a meeting of tens of Ministers of Agriculture from all over the world was held in Berlin. In such circumstances, the voice of 30,000 protesters could not go unnoticed.

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Will free trade bring nothing but benefits?

| Foreign Markets |

Negotiations concerning the signing of Transatlantic Trade and Investment Partnership (TTIP) are to start in 2014. The parties of the agreement are the European Union and the USA. The partnership will help lift barriers in the traffic of goods and services between Europe and the USA. The development appears beneficial for business, but at the same time arouses some fears.

Different standards

The European Union observes stringent standards connected with the protection of climate and the natural environment from the negative impact of industrial activity. Restrictions introduced by the EU bodies are mainly based on REACH (Registration, Evaluation and Authorisation of Chemicals) regulation, which specifies the rules of application and trade of particular chemicals, and a climate convention regulating CO2 production and trade. However, in US legislation there are no analogous regulations on chemical substances. Nor have the USA agreed to observe international protocols on greenhouse gases emissions.

Access to resources

Most European producers of chemicals, of artificial fertilizers in particular, depend on the imports of natural gas, which is indispensable for fertilizer manufacturing. By contrast, US enterprises enjoy access to gas which is three times cheaper and comes from shale deposits. If free trade is introduced, there might appear an issue with the protection of the EU market from inexpensive American goods.

Potential consequences

As a result, fertilizer manufacturers from North America and the European Union would compete on unfair basis. Unless the Partnership involves a caveat against such a situation, the EU market might become dependent on American products, posing a threat to the food supply safety on the Old Continent. Ironically, American companies could eliminate EU manufacturers despite the fact that European installations are frequently more efficient and the norms regarding environment protection are observed much more strictly on our continent.

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GMO remains a bone of contention

| Foreign Markets |

In July 2013 the European Union and the USA opened negotiations regarding a free trade area called Transatlantic Trade and Investment Partnership (TTIP) between the two entities. Some issues have proved particularly problematic, though, and the road to consensus does not look smooth.

What TTIP can provide

TTIP is likely to become a breakthrough move for the global trade. The initiative involves lifting the barriers in the traffic of goods, services, public orders and investment. Seeing that transfer of goods between the EU and the USA is the largest such exchange in the world, worth 2 billion EUR daily, the savings resulting from a free trade area might reach 120 billion EUR per year.

A few objections remain

The EU is particularly concerned about the possibility of the European market being flooded with genetically modified food. EU member countries are very strict about GMO use, due to obvious reasons: introducing genetically modified organisms to the natural environment means interbreeding, which might trigger wholly unpredictable changes in plants. The US Senate Committee on Finance is under pressure from the American farmers and has stressed the requirement that EU must ease the limitations concerning GMO.

In search of a solution

EU is known for prioritizing sustainable farming. Therefore, European agricultural producers are certain to oppose the idea of relaxing GMO trade rules. However, the stake here is making trade easier for thousands of enterprises, bringing financial benefits for million of inhabitants of EU countries and the USA. Is GMO to become the issue which signing TTIP will depend on? Will lobbyists manage to persuade either side to make concessions? We must wait and see what the second round of negotiations in December will bring.

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