Copa-Cogeca: The united voice of farmers and their cooperatives in the European Union

Daniel Azevedo - Policy Adviser Bilateral Trade Agreements

Hearing on the Role of Civil Society in the EU-Japan FTA: European Stakeholders’ Perspectives Brussels, 3rd December 2013

FTA EU – Japan

The perspective of EU Farmers and Cooperatives

Index

• Who are Copa and Cogeca?

• Copa-Cogeca’s position on Trade

• Agricultural trade relations with Japan

• Divergence and Convergence

• Key Messages

Copa-Cogeca | The voice of European farmers and their cooperatives | 2

Copa-Cogeca | The voice of European farmers and their cooperatives | 3

Who are Copa and Cogeca?

Two organisations…

• Copa - representing 25 million farmers and their families (57 EU farmers’ organisations)

• Cogeca - around 38,000 cooperatives (31 EU agricultural cooperatives organisations)

• Copa-Cogeca have altogether 70 Member and34 Partner Organisations

• 38 of the members are from the new MemberStates

Copa-Cogeca | The voice of European farmers and their cooperatives | 4

How is Copa-Cogeca organised?

Working Parties

POCC/CCC

Copa Praesidium

Cogeca Praesidium

Joint Copa and Cogeca Secretariat

European Commission, Council of Ministers, European Parliament, Permanent

Representations, Media…

Copa-Cogeca | The voice of European farmers and their cooperatives | 5

How is Copa-Cogeca organised?

The Working Parties

• 45 Working Parties, dealing with market and policy

developments

• Prepare joint Copa and Cogeca positions

• Topics:commodities, cooperative affairs, rural development, biotechnology, environment,

animal health & welfare …

Copa-Cogeca | The voice of European farmers and their cooperatives | 6

How is Copa-Cogeca organised?

The PraesidiumThe Praesidium

• Composed of the Presidents of the MemberOrganisations (70)

• Copa and Cogeca each have a Praesidium, Presidency

and a President:

Christian Pèes (FR)Current Cogeca

President

Albert Jan Maat (NL)Current Copa President

Copa-Cogeca's position on Trade

Priority - Multilateral negotiations at the WTO

We strongly support a deep and comprehensive free trade agreement (FTA) between the EU and Japan.

Public Consultation on the future of EU Japan trade and economic relations (2010) and Joint Statement (July 2012 and November 2013).

Common views on the role of agriculture in society. We jointly set up the World Farmers’ Organisation and we often adopt the same approach for WTO negotiations.

We are looking to closely cooperate to strengthen issues that are of common interest: traceability, GIs, animal welfare, sanitary and phytosanitary issues.

Copa-Cogeca | The voice of European farmers and their cooperatives | 7

Agricultural trade relations with Japan

EU has a positive trade balance with Japan and has improved recently - €2.17 billion in 2011.

Copa-Cogeca | The voice of European farmers and their cooperatives | 8

PRODUCT Export (value in € million)

Import (value in € million)

Balance (value in € million)

Cereals (incl. feed cereals) 107 1 106 Rice 0 1 0 Animal feed, of which: 34 2 31

- cereals 22 0 22 - high protein 9 2 6

Vegetables 34 0 34 Fruit 5 0 5 Fruit & veg preparations 135 4 130 Olive oil 115 0 115 Butter & butter fats 21 0 21 SMP 11 0 11 Cheese & curd 221 0 221 Milk & milk products 29 0 29 Sugar 2 0 2 Wine 607 1 606 Pigmeat 777 0 777 Poultrymeat 29 0 29 Raw tobacco 12 1 11 Other products 66 2 64 TOTAL 2,182 12 2,170

Table 1: Trade flow between the EU and Japan in millions of Euros in 2011

Japan as a small supplier - EU imported €12 million in 2011 in comparison with €52.6 billion of all imports from third Countries

EU Exports towards Japan - amounting to €2.2 billion, i.e. 4.9% of total EU-27 agricultural exports

EU - offensive in the agricultural chapter

Looking for the same market access as our main competitors

Agricultural trade relations with Japan

Copa-Cogeca | The voice of European farmers and their cooperatives | 9

Preparations of fruits and vegetables are the most important Japanese products entering the EU market, followed by protein crops.

Top imports (left) from and exports (right) to Japan in 2011 – in million euro Own elaborations on Eurostat-ComExt data

EU exports to Japan:

-pigmeat for €777 million (Japan is the second biggest buyer of European pigmeat after Russia), -wine for €607 million -cheese for €221 million.

-Mostly products that are not in competition with the local production

The agriculture in Japan

Rice - Japan is highly self-sufficient for rice and rice production.

Livestock - Production of livestock products, has grown strongly (beef and pig)

Fruits and vegetables - These products are produced by business-oriented farms. Exports of these products have increased by 60% in recent years, and this growth is expected to continue.

Copa-Cogeca | The voice of European farmers and their cooperatives | 10

1965 1975 1985 1995 2005 Rice (ha) 0.58 0.60 0.61 0.85 0.96 Dairy (head) 3.4 11.2 25.6 44.0 59.7 Beef cattle (head) 1.3 3.9 8.7 17.5 30.7 Pig (head) 5.7 34.4 129.0 545.2 1 233.3

Farm size, 1965-2005

EU-Japan convergence/divergence on agri-food

Japan is a developed economy, its market has strong purchasing power

Net importer of certain agricultural goods – agri-food more important than raw materials

Japan lifted the ban on imports of beef and beef products from France and the Netherlands (February 2013). We expect that Japan will extend this measure to the remaining EU countries (Ireland?).

Same approach on high standards - Food safety, ex. traceability, GMOs

EU - potential to export added value and processed food products.

Japan - producing high-quality and specialised products for

domestic and foreign markets (Ex: ‘Kobe beef’).

Copa-Cogeca | The voice of European farmers and their cooperatives | 11

Demand for meat and dairy products has increased strongly

- affordability and westernisation of the Japanese diet; - consumption growth of between 400% and 700% in the last 40

years, - new market for Veal

The share of farm households in rural communities has fallen from 46% in the ‘70s to 11% in 2000.

Agricultural policy in Japan:

- the maintenance of comparable income levels between agricultural producers and other actors in the economy,- maintenance of a secure food supply,- preservation of the benefits that agriculture brings to landscapes and social benefits, including especially for rural economies.

Copa-Cogeca | The voice of European farmers and their cooperatives | 12

Non-tariff measures

Unanswered issues regarding SPS measures (sanitary and phytosanitary):

- Japan does not recognise the EU as a single market - Japan has not implemented the provisions of the WTO’s SPS agreement on regionalisation with respect to the EU

EU exports of processed agricultural products to Japan by up to 200% if both tariffs and non-tariff measures were abolished. (European Commission’s Impact Assessment Report on EU-Japan Trade Relations (2012)).

Trade barriers typically raise costs by about 13% for EU operators trying to penetrate the Japanese market.

Copa-Cogeca | The voice of European farmers and their cooperatives | 13

Tariffs

Tariffs

Tariffs remain high on agricultural products. Japan's trade-weighted average tariff on European food and drink exports is 34.7%, with several tariff peaks above 500%, while the EU's trade-weighted average tariff is 12.4%.

Japan applies high tariffs to some EU agricultural products (ex: 38,5% on beef and 30 % cheese).

Pigmeat – same market access as our competitors.

Dairy – Who is going to supply this region (Asean)?

EU only has offensive interests in certain sectors, such as pigmeat, cheese, wine and some cereals other than wheat.

Copa-Cogeca | The voice of European farmers and their cooperatives | 14

Wine

Japan’s wine market - mature established- per-capita consumption: 2.3 litres per inhabitant in 2011

2nd largest EU agricultural export (€604 million)

Japanese wine market accounts for 2.9 million hl (similar to Switzerland), which is just above 1% of global wine consumption.

Average price of a litre of EU wine imported by Japan is higher than the average EU wine export price: €4.51/litre compared to €3.67/litre (2012).

Copa-Cogeca | The voice of European farmers and their cooperatives | 15

Full tariff removal could boost EU meat exports by 13

Pigmeat : In 2011 Japan imported €777 million of pigmeat from the EU.

- Currently, Japanese pork imports are subject to a differential duty mechanism known as the “minimum import price system” also referred to as the “gate price”.

Copa-Cogeca | The voice of European farmers and their cooperatives | 16

Livestock

Olive Oil

- Olive oil consumed in Japan is imported. - Olive oil consumption has increased from 4,000 t in the early 1990s to

40,000 t in 2011, and are growing

Dairy:

- In 2011, exports of cheese and milk & milk products to Japan total 221 and 29 € million respectively.

Fruit and vegetables

- In 2008 this sector represented 3% of total exports from the EU to Japan.- This amount could increase if Japan’s approval procedures to import new

varieties of fresh fruit and vegetables were shorter and more transparent.

Hop sector (not sensitive for Japan)

- In 2011, EU exported around 34 € million (Germany, Czech Republic, Slovenia)

Copa-Cogeca | The voice of European farmers and their cooperatives | 17

Olive oil, Dairy, Hop, Fruits and Vegetables

Japan is the tenth largest rice producer in the world (production at around 10 million t).

Japan is highly self-sufficient for rice

- Quantities traded between the EU and Japan are very small and it can be expected that this situation will not change even if Japan or the EU lift their tariffs on rice

• EU imports 120 t on average from Japan.

• EU exports 116 t on average to Japan.

Copa-Cogeca | The voice of European farmers and their cooperatives | 18

Rice

Key Messages

Copa-Cogeca | The voice of European farmers and their cooperatives | 19

Both the EU and Japan are highly developed economies and major global traders and investors.

An EU-Japan agreement would greatly contribute to guaranteeing that EU farmers will not be at a disadvantage compared to their counterparts in the TPP agreement.

Common views on the role of agriculture in society.

Cooperation to improve SPS chapter in WTO

Market opportunities: It would greatly benefit the EU pigmeat, dairy, wine and olive sectors and offer EU exporters enormous opportunities.

Promotion programme for EU agricultural products

Copa-Cogeca | The voice of European farmers and their cooperatives | 20

Copa-Cogeca:Copa-Cogeca:

Defending and developing Defending and developing the European Model of the European Model of

AgricultureAgriculture

www.copa-cogeca.eu