These promising signs were somewhat overshadowed by news of other nations aggressively entering into trade agreements. One such agreement that is nearing ratification is a negotiation between the two largest trading partners for the United States: Canada and the European Union.
As we compete with Canada and developing nations for a share of the EU market, we are encouraged by free-trade talks between the U. S. and the EU during the past year. Unlike many earlier FTAs, there is almost no one who is severely opposed. Businesses and trade groups want the deal. If anything, these groups understand that a successful FTA with the EU would address tariffs as well as non-tariff barriers such as subsidies, sanitary and phytosanitary issues, and maximum residue limits that have stifled agricultural trade.
Overall, California farmers and ranchers have benefited from robust European trade for years. With a firm place as our second-largest export destination, the European Union purchases more than $2 billion of California-produced agricultural products, roughly 20 percent of its agricultural exports from the U.S. Almonds lead the commodities exported to Europe by a large margin, accounting for nearly 40 percent of that total, while wine is at 20 percent and walnuts come in at more than 10 percent. The Europeans love our pistachios and raisins, with a broad swath of grains, fruits, vegetables and nursery crops rounding out the list of top exports to Europe.
In October 2011, United States and EU officials created a High Level Working Group to discuss improving trade relations. Since then, the group has made progress toward defining the possibility of a free-trade agreement as one of its primary objectives. The working group plans to release its findings by the end of the year.
We are watching the development of these talks, being especially mindful of any problems that might arise. The largest problem came up last month after questions arose on whether agricultural trade would be included in the talks. It has since become clearer that agriculture must be part of discussions, with no exclusions as we’ve seen in other agreements.
The discussions occur as some EU member countries stand on the brink of collapse. But that provides the U.S. and the EU extra motivation to stimulate both economies. That said, an agreement with 27 nations involved will perhaps be more complicated than any agreement to date. If you think U.S. regulations are bad, imagine navigating the web of ours plus theirs in negotiations, which will make agreement all the more challenging.
Fortunately, we have strong allies in Congress such as the incoming chair of the House Ways and Means Trade Subcommittee, Rep. Devin Nunes, R-Visalia, who recently introduced a bill to authorize the administration to enter into negotiations with the EU. We look forward to working with the new 113th Congress and the administration on ways to be aggressive in opening and expanding new markets for California agriculture.