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GOURMET NEWS SEPTEMBER 2014 www.gourmetnews.com GENERAL NEWS 1 1 Cheese Continued from PAGE 10 with rules that do not necessarily apply to them. "Diversity is a strength of the food system, and food safety and that diversity have to work together. We're very commit- ted to making that happen, but it's a lot of work," he said. Taylor added, "The FDA cannot do it by ourselves without the input, the expertise, the data of the industry. That's why we put enormous weight and a lot of effort into building our stakeholder engagement and building these relationships with the indus- try." In an effort to help share data with the cheese industry, the FDA and ACS are pledging to henceforth meet at least once annually, as well as to engage in ongoing conversations throughout the year when- ever new issues arise. American specialty cheesemakers look to the future One thing Taylor wanted to make perfectly clear is that the FDA is not specifically tar- geting the cheese industry. Nevertheless, it seems clear that cheese is under increased scrutiny from the agency in recent years. In many ways, the attention cheesemakers are receiving from regulators could actually be seen as sign of success. With specialty cheese burgeoning into a $4.5 billion in- dustry, and with more consumers than ever before nibbling on cheese produced by small craft dairies, regulators were bound to take notice. "The U.S. is just waking up to the world of wonderful cheeses. This is just the beginning of an industry that has yet to de- velop to its fullest. I welcome this move- ment, and I just hope that education will go hand-in-hand with cheesemaking, as consumers expect more from their cheese- makers," said Weber. "It's an exciting time to be a cheesemaker. We're just at the be- ginning of what it will be." With the FDA and the cheese industry working together, the hope is that con- sumers will have continued access to their favorite cheeses, all produced in a manner that ensures they are free of any potential hazards. For American con- sumers increasingly hungry for artisan cheese, this news could not come at a better time. "I can see a groundswell of anger around not getting the cheese that you want into this country or not being made in this country," said Bivins. "Americans in general, their palates are maturing, and they are looking for better quality products. And they are willing to pay more for those products – handmade artisan cheeses that have a lot of history and tradition behind them." GN Trade Agreement Continued from PAGE 1 While tariff reduction is a showcase issue in the negotiations, and the two sides' initial offers were for 86 percent (U.S.) and 96 percent (EU) decreases, a number of other trade barriers pose a sig- nificant challenge to diplomats. With re- gard to food safety and purity, current sanitary and phytosanitary (SPS) meas- ures sometimes vary widely between the United States and EU. Among other things, these measures protect consumers from exposure to food contaminants, tox- ins and disease-causing organisms. The Office of the United States Trade Representative contends that as tariffs and related fees have come down on both sides, thereby reducing one barrier to agri- cultural trade, the EU has substituted overly-restrictive and non-scientific-based SPS standards to block or inhibit U.S. food exports. American poultry processors, for example, have been prohibited from using the domestically-approved practice of chlorine washing on chicken products marked for sale in the EU. In addition to SPS standards, the USTR has charged the EU with using technical barriers to trade (TBT), including various product standards and testing require- ments, as another form of tariff. The EU has asserted that U.S. regulators have like- wise restricted European goods from the American market. Just as the United States and its trading partners addressed SPS and TBT issues in recent free trade agreements with South Korea, Colombia and Panama, the proposed U.S.-EU agreement addresses these matters as well. TTIP seeks to pro- mote compatibility, including the stream- lining of sometimes redundant standards, as well as increasing transparency, and co- operation with regard to SPS and TBT reg- ulations and standards. While TTIP would be the world's largest- ever bilateral trade and investment agree- ment, ironically it is the signing of these other, smaller U.S. free trade agreements that have hurt companies on both sides of the Atlantic and added to the urgency of TTIP negotiations. An example of this process in the food industry involves arti- choke products. Following U.S. free trade agreements with Mexico in the North American Free Trade Agreement of 1994, and Peru in 2006, which spurred the im- porting of duty-free artichoke products, traditional top producer Spain suffered due to a longstanding 14.9 percent duty on ex- ports to the United States. "The folks in Spain that we have been doing business with the longest really aren't able to sell much in the U.S. market any- more," said Bob Bauer, President of the As- sociation of Food Industries, an organization of about 1,000 U.S. and EU companies that import or ship foods to the United States. "That's a 15 percent price dif- ference, and even if their product is better, that difference gets people to buy from other sources." One particular challenge for negotiators is the fundamentally different approaches to product standards and, particularly, pub- lic health and safety standards, taken by the two sides. Operating from the "Precaution- ary Principle," the European Union, for ex- ample, prohibits GMOs from all food products, taking the position that until companies provide scientific evidence that documents the safety of GMOs, consumers should be protected against potential harm. The United States, on the other hand, fa- vors a market-based, or market-encourag- ing approach. GMOs are allowed in American-sold foods and will remain so until scientific evidence demonstrates them to be dangerous. Hormone-treated live- stock is another point of contention, with the EU banning such beef that is approved for sale in the United States. While philosophical differences pose a challenge, there is reason for optimism as well. "I think the regulators on both sides really want to do it," said American Asso- ciation of Exporters and Importers Presi- dent and CEO Marianne Rowden, who has been directly involved in the six rounds of negotiations to date. "There are problems, but the position of Congress seems to be, 'We should work with the Europeans.' They trust the Europeans. It's not like with a China, where there is concern about qual- ity issues. With the EU, there aren't issues like labor standards, environmental issues or any really odd political issues that hold up, say, a Colombia free trade agreement." (That agreement was signed in 2011 after much negotiation.) While the recent worldwide recession has harmed many, it may actually boost the chances of an agreement on TTIP being reached. With politicians under pressure to facilitate business and increase employ- ment, ideological differences may end up being relaxed somewhat. "Policymakers are being forced, not necessarily to rethink their philosophies, but certainly to back off a little bit and say, 'Where can we save com- panies money?' 'How do we lower costs and get more economic activity?' 'More trade is good,'" said Rowden. Among those standing to benefit the most from TTIP are small and medium size companies, which both sides agree form the backbone of their respective economies. These companies can struggle in the current system of overlapping prod- uct, testing and safety standards. A manu- facturer may need to meet one set of standards to sell in the United States, and a separate set to sell in EU countries. Less frequent, more streamlined regulations and testing would mean decreased company spending on such measures, which can be a heavy burden. As for the prolonged negotiation process and likelihood of a successful outcome, AAEI President Rowden thinks the key to an agreement lies at the top. "I think the negotiators and the regulators will do the best that they can to come up with some options, but you need the [two sides' chief executives] to really do the heavy lift and make these kinds of agreements happen," she said, referring on the U.S. side to Pres- ident Obama convening congressional De- mocrats and influencing acceptance of any proposed agreement. That may be a tall order. While the Obama administration successfully com- pleted the final stages of free trade agree- ments with South Korea, Colombia and Panama in 2011 after those agreements had largely been negotiated by the Bush Admin- istration, members of Congress may be leery of supporting an agreement that could cost American jobs. By lowering barriers to the importing of European products, Amer- ican manufacturers will face increased com- petition that could affect their bottom lines. In addition to trade, the wide-ranging TTIP addresses environmental, labor and investment, as well as legal and regulatory issues between the United States and EU. Even if the sides can agree on the specifics of lowered tariffs and streamlined sanitary and phytosanitary standards and technical barriers to trade, the issue of enforcement of any agreement will involve a new set of challenges. One issue in negotiations in- volves a proposal that would allow indi- vidual companies to bring legal action against governments that fail to enforce TTIP provisions. With much on the table, U.S. and EU ne- gotiators may well miss the intended dead- line of year's end for reaching a final agreement. When asked if the two sides might sign an agreement in 2014, TTIP ne- gotiator Marianne Rowden of the American Association of Exporters and Importers re- sponded, "No way." Some observers are viewing 2016-17 as a more likely time frame. On the other hand, an agreement that further opens trade in an area of 815 mil- lion consumers could well be worth the wait. "I'm optimistic, but also know that we have to be very patient," said Bob Bauer, President of the Association of Food Indus- tries. "We're not anticipating anything for quite some time, but we'll welcome it when it does come." GN

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