by PressThe EU market has become more accessible to American farmers
The EU market has become more accessible to American farmers
The U.S. and the European Union finally managed to reach an agreement on the amount of reciprocal duties. It was decided to suspend tariffs on agricultural products for 5 years. Now more American products, including wheat and soybeans, will appear on the EU market.
This became possible due to adherence to the framework program of cooperation between the countries. Such a mechanism is used to coordinate major disputes, and is primarily aimed at resolving the situation with civilian aircrafts.
It all started when the WTO concluded in 2018 that the subsidies that the European Union imposed on Airbus aircraft had a negative impact on the production of aircraft in the United States. Therefore, the White House has every right to impose retaliatory measures, which is provided by the dispute settlement system adopted by the World Trade Organization.
In 2019, the U.S. also raised duties on a large list of products from the European Union, which included dairy products. A total of $11 billion worth of exports fell under the retaliatory measures.
In the fall of 2020, the WTO allowed the EU to impose duties on U.S. goods worth a total of $4 billion. This decision was dictated by the introduction of super-subsidies for the Boeing aircraft corporation. The list of products included cheese, spirits, fruit, juices and others. Duties on wheat from the U.S. reduced annual imports by 538,000 tons. Shipments of hard red spring and winter wheat decreased most of all.
A few months ago, however, the countries decided to review their trade relations, and as a result, the duties were suspended. Thanks to this, U.S. farmers quickly began exporting wheat to the EU. Not only cereal producers are happy about the improved situation, but also soybean growers, who have significantly increased their supply of products. The EU buys more than 14 million tons of soybeans annually, which are used as feed for animals and birds. The main supplier is the United States. This crop is valued as a source of quality proteins, which are necessary for the growth of livestock. In addition, soybeans are used to produce vegetable milk.
If for grain farmers the abolition of duties became an opportunity to increase exports, for representatives of the dairy industry there are still many obstacles. U.S. retailers complain that they regularly have to adjust to new rules and controls imposed by the European Union. All this creates difficulties for producers and slows down the process of strengthening and expanding trade relations between the countries. In addition, going through a huge number of studies increases costs, making exports to the EU less attractive.