CEPM Newsletter 21


In favour of real competition
In its international trade relations, the European Union has perfected the art of sabotaging itself. This is even truer in agriculture, where distortions already began in 1962! It was at this time that the EEC – in order to be authorized by the GATT (the ancestor of the WTO) to create the common grain market – granted to the USA (and the main operators) the right to export without duties cereal substitutes (soybean meal, corn gluten feed). This supposedly minor concession has totally destabilized European agriculture as a whole. The proliferation of free trade agreements – recently the CETA and MERCOSUR – improved access to the EU market for primary agricultural products, thereby increasing the existing strains on domestic prices, going as far as to turn certain sectors – which had hitherto been net exporters – into importers.
For the agricultural world, these concessions without any direct counterpart and without time limit are aggravated by a series of competition distortions on the modes of production. While the EU is imposing more and more constraints on crop rotation, irrigation, seeds, treatments, and so on, our foreign competitors are totally free to export to the European market products sown, cultivated and harvested under conditions banned in the EU!
This double punishment seems to be accepted as inevitable, by everyone but farmers, because no one – not even the green NGOs, so demanding elsewhere – seems to question the terms. No one? Not quite. At the end of the G7 summit in Biarritz, President Macron shared his concern on this situation and declared himself eager to restore a more balanced competition. This is an essential issue because no real reform of the CAP will be possible without holding imports to the same sanitary and phyto-sanitary rules imposed on our producers. And we can hope that the next Commission, via the Green Deal brought by its President, will put this topic at the top of the agenda.