The European Commission has reported the largest annual level of agri-food exports ever in the EU: are new international trade agreements behind the boost?
2016 set a new record for exports of agri-food products from the EU - already the world’s single largest exporter - reaching €130.7 billion by December – a level almost €30 billion higher than 2011.
This equates to a 29% overall increase over the past six years, and a €1.7 billion increase since 2015.
Rises in the value of exports to the United States, China, South Korea, Japan and Vietnam brought the most substantial increases throughout the year.
Where are these developments coming from, and will the EU’s agri-food industry continue to see such a level of growth in the coming years?
New trade deals
In a study ordered by the European Commission, independent consultancy body Copenhagen Economics found that trade deals – which liberalise markets between the EU and other countries - have helped produce the record numbers.
Research focussed on three new ‘Free Trade’ agreements with South Korea, Switzerland and Mexico, all of which have either completely removed or are in the process of removing trade tariffs and barriers.
Looking at the value of exports three years after the deals were implemented, a €105 million rise occurred with Mexico and a €532 million rise with Switzerland – processed foods and vegetables account for majority in both countries.
In South Korea, where the free trade agreement is still not yet fully implemented, agri-food imports added €439 million in 2015 alone.
The EU commissioner for agriculture Phil Hogan said: “These three agreements alone have increased EU agri-food exports by more than €1 billion and have raised value-added in the agri-food sector by €600 million. Just as importantly, this increase in exports has supported thousands of jobs in total across the EU, most of which in the agri-food sector, including in primary agriculture. These figures are clear evidence that ambitious and balanced trade deals work for European food and farming."
Following the recent approval of the controversial EU-Canada Comprehensive Trade Agreement (CETA), the Commission may be keen to show that market liberalisation will work in the industry’s favour.
Cecilia Malmström, the EU commissioner for trade, said: "Trade deals, done right, are a force for good for our farmers and food producers. This study also gives important input on how we can continue to cut unnecessary red tape and get rid of barriers in our trade negotiations going forward."
The Commission’s report also noted that through exports to Canada, Europe already generates a surplus of €1.25 billion per year, just through agri-foods. The lifting of tariffs is expected to generate an additional €500 million per year immediately.