the impacts of the ttip agreement on the eu and finnish agricultural sector
TRANSCRIPT
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© Natural Resources Institute Finland
Ellen Huan-Niemi (Luke) Jyrki Niemi (Luke) Janne Niemi (VATT)
The impacts of the TTIP agreement on the EU and Finnish agricultural sector
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EU-US Agricultural Trade • The EU is the world’s largest importer of agricultural and
food products, followed by the US and China.
• US exports of agricultural and food products to the EU accounted for only 10% of EU’s agricultural imports in 2015, down from 17% in 1995.
• EU agricultural imports more than doubled over the past two decades, reaching a robust $126 billion in 2015, however US exports to the EU increased at a slower rate – rising only 17% over the same period.
• US exports of consumer-oriented products have been a key propeller of the growth, but EU tariff and non-tariff measures (NTMs) continue to challenge US export growth to the EU.
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(USDA 2016)
3
Bulk
Bulk
Consumer
Consumer
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4
Composition of US exports to the EU in 2015
Source: European Commission 2016
Total = 40%
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(USDA 2016)
17%
Brazil & Argentina
5
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Five different scenarios for the TTIP
• Business as usual with no TTIP agreement;
• A complete removal of tariffs between the EU and US, but all the non-tariff measures (NTMs) are still in place;
• A complete removal of tariffs between the EU and US plus the non-tariff measures (NTMs) are lowered by 25%, but excluding beef and dairy products;
• A complete removal of tariffs between the EU and US plus the non-tariff measures (NTMs) are lowered by 25% for all agricultural products;
• A complete removal of tariffs between the EU and US plus the non-tariff measures (NTMs) are lowered by 25% for all agricultural products; however, there is a strong preference for domestically produced products and labels by consumers only in the EU.
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US Total Exports of Agricultural Products to the EU in 2025 Million US Dollars
2713
1434 2022
99
2862
593 998
3030
717
3028
530
9339
3501
1725
1153
1753
82
2124
435 565
1088
601 996
344
6915
2858
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with preference forEU domestic products
7
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US Total Exports of Bovine Meat to the EU Member States in 2025
0,8 3,3 31
0,1
79
4,3
503
275
28
73
1 0
100
200
300
400
500
600
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors withpreference for domestic products
Million US Dollars
8
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US Total Exports of Poutry and Pig Meat to the EU Member States in 2025
1,4 40 3,5 58 27 11,3
1683
25 49
1128
4,2 0
200
400
600
800
1000
1200
1400
1600
1800
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors withpreference for domestic products
Million US Dollars
9
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US Total Exports of Dairy Products to the EU Member States in 2025
3,6 22 23 3,4
828
3,6
867
1101
94 77
5,8 0
200
400
600
800
1000
1200
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors withpreference for domestic products
Million US Dollars
10
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US Total Exports of Other Food Products to the EU Member States in 2025
101 216 268
98
1543
293
2641
2007
254
1677
242
0
500
1000
1500
2000
2500
3000Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors withpreference for domestic products
Million US Dollars
11
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12
US Agricultural Production in 2025 compared to BAU
Million US Dollars
643
1 704
1 650
535
1 167
6 048
1 229
2 547
2 183
795
1 990
9 732
0 2 000 4 000 6 000 8 000 10 000 12 000
Bovine meat
Poultry and Pig meat
Dairy products
Beverages and Tobacco
Primary Agriculture
Processed Food Products
NTMs -25% all sectors
Tariff removal only
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13
EU Production of Primary Agriculture according to region in 2025 compared to BAU
Million US Dollars
-12
-18
-330
-261
-292
-719
-1 678
-27
-38
-479
-364
-336
-1 353
-2 789
-3 000 -2 500 -2 000 -1 500 -1 000 -500 0
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU28
NTMs -25% all sectors
Tariff removal only
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14
EU Production of Processed Food Products according to region in 2025 compared to BAU
Million US Dollars
20
68
-64
-425
-620
224
-922
17
75
50
-521
-498
538
-446
-1 000 -800 -600 -400 -200 0 200 400 600 800
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU28
NTMs -25% all sectorsTariff removal only
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15 15.12.2016
Composition of EU exports to the US in 2015
Source: European Commission 2016
Total = 50%
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EU Total Exports of Agricultural Products to the US in 2025 Million US Dollars
9 143 15 5
1013
74 6 50
997 505
34
2951
10941
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
Cereals Fruit &vegetables
Oilseeds FibreCrops
OtherCrops
AnimalProducts
BovineMeat
Poultry &Pig Meat
VegetableOil
DairyProducts
Sugar OtherFood
Products
Beverages& Tobacco
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
16
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Total Exports of Beverages & Tobacco from the EU Member States to the US in 2025
Million US Dollars
17
14 48
438
22
582
165
1634
1356
40
5896
746
0
1000
2000
3000
4000
5000
6000
7000
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors
more than 30 times compared to Finland
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Total Exports of Other Food Products from the EU Member States to the US in 2025
Million US Dollars
18
10 85
52 31
519
117
262 290
197
1332
55
0
200
400
600
800
1000
1200
1400
1600
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors
more than 8 times compared to Finland
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Total Exports of Dairy Products from the EU Member States to the US in 2025
Million US Dollars
19
18 18 2 3 8
40
9 14
78
309
6 0
50
100
150
200
250
300
350
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors
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(USDA 2016)
US Trade Deficit in Agricultural Trade with the EU
20
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US Trade Surplus in Agricultural Trade with the World
21
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EU Agricultural Trade Balance with the US in 2025
Million US Dollars
7963
33
-3822
-5243
6042
-6000
-4000
-2000
0
2000
4000
6000
8000
10000
Business as usual2025
Tariffs removal only2025
NTMs -25%excluding
beef & dairy2025
NTMs -25%all sectors
2025
NTMs -25% allsectors with
preference for EUdomestic products
22
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23
GDP in 2025 compared to BAU
1,5 %
1,5 %
1,5 %
1,8 %
1,5 %
1,4 %
2,2 %
2,2 %
1,8 %
1,5 %
1,4 %
1,7 %
1,6 %
1,7 %
1,7 %
1,6 %
2,1 %
1,6 %
1,5 %
2,4 %
2,5 %
2,0 %
1,6 %
1,5 %
1,8 %
1,9 %
0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 3,0 %
Finland
Denmark
Sweden
Baltic
Germany
Poland
UK and Ireland
Benelux
Balkan
Mediterranean EU
Central EU
EU28
US
NTMs -25% all sectorsTariff removal only
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24
Contribution of the changes in terms of trade until 2025 to welfare
Million US Dollars
195
187
2 120
1 470
1 340
3 865
10 378
-10 585
912
826
7 776
5 766
3 552
14 155
38 822
-24 364
-30 000 -20 000 -10 000 0 10 000 20 000 30 000 40 000 50 000
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU
United States
NTMs -25% all sectors
Tariff removal only
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• The US agenda in the TTIP negotiations will definitely include the total liberalisation of agricultural tariffs and partial removal of non-tariff measures (NTMs) in order to propel the export growth of consumer-oriented agricultural products to the EU market and close-up the trade deficit with the EU.
• The US will experience a dramatic increase in the exports of agricultural products to the EU with the implementation of the TTIP, especially for meat, dairy and other processed food products.
• In contrast, the EU agricultural exports to the US will grow at a slower pace compared to the US with the implementation of the TTIP, and the growth is concentrated on beverages, other processed food products and dairy products.
Conclusions
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• The total liberalisation of agricultural tariffs and partial removal of
non-tariff measures will push the EU agricultural trade balance into a large trade deficit, however the strong preference for domestically produced products and labels by the EU consumers will maintain the long-term trade surplus for the EU.
• The gains for Finland in the upsurge of agricultural trade between the EU and the US will be minimal due to the implementation of the TTIP.
• The increase in trade between the EU and US will generate GDP growth both in Finland and the rest of the EU in the period of ten years. In addition, the improvement in the terms of trade will generate positive welfare effects for both Finland and the EU, thus the TTIP agreement as whole will be a stimulus for the economies of the EU member states.
Conclusions
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27 15.12.2016 Teppo Tutkija