The joint statement on transatlantic trade and investment published by the EU and US included undertakings by the EU to offer increased market access to US seafood and agricultural goods.
While the joint statement is far from a completed trade deal, it does give some strong indications of what matters for both sides in the coming negotiations. For the US, it is about market access to EU and the so-called ‘level playing field’. For the EU is seems to be about limiting the damage to exports to the US from increased tariffs.
Looking at the framework overall, it seems that both sides have something to be happy about. The EU limited the damage from tariffs to the higher of either the most-favoured-nation rate – ie the tariff level that has been in place for years – or 15%. While this is not great news, the alternatives mooted by President Trump over recent months would have been considerably worse.
The US gets to have tariffs eliminated on all its industrial goods and an intention from the EU to provide “preferential market access for a wide range of US seafood and agricultural goods”. That last line could send a chill down the spine of Irish farmers as it sounds like a situation could arise where Irish exports to the EU could be directly competing against dairy and meat products from the US.
However, with all such deals, the devil is in the detail. The joint statement published is not a final deal. It says it is a “concrete demonstration of our commitment to fair, balanced, and mutually beneficial trade and investment” and the document itself is littered with words and phrases like “intends to”, “plans to” and “commits to undertake efforts to” rather than give guarantees that anything will actually happen.
Safe to say, there is plenty of negotiating left.
Even if there is an agreement reached in line with what was published last week, we can look at the difference between the advertised intention of previous deals and the actual outcome. During his first term in 2019 President Trump negotiated a trade deal with the EU which would see an increase the quota for hormone free beef imports from the US rise from 18,500t in 2020 to 35,000t from 2026.
Importantly from the EU point of view, the increase in the US quota was made by giving the US a larger share of the global EU beef import quota, rather than increasing the total amount of hormone-free beef that could be imported.
In 2020, the US quota was 18,500t and the rest of the world’ quota was 26,500t, giving a total of 45,000t. The increase to 35,000t for the US by 2026 will see the quota for the rest of the world fall to 10,000t, meaning there would be no net increase in hormone-free beef imports to the EU under the plan.
Despite the announcements about how big an opportunity this was for US beef farmers at the time, the data suggests that the US beef industry has been unwilling or unable to use it (see Figure 1).
Despite the rises in the amount that can be exported from the US to the EU, the quota is barely half-filled each quarter. In 2023, the US had a quota of 27,800t, but only used 13,874t. This left 13,926t of quota unused by the US. As the whole 27,800t was ringfenced for the US, no other nation could take advantage of it, meaning the lack of use by US farmers meant total EU beef imports under the quota were lower than they might have been had the 2019 Trump deal never been signed.
US view
To get a better idea of what US farmers hope to get from the current round of trade negotiations, the Irish Farmers Journal sat down with David Salmonsen who is senior director of government affairs at the American Farm Bureau Federation, the country’s largest representative organisation for farm and ranch families.
Salmonsen said the joint statement was a positive sign as it meant there continues to be progress, and it is part of the process of working towards a final trade agreement.
He said that it while it seemed that the tariff issues had been got past, there was room to “talk about some other issues on products, some of the non-tariff barriers that have been around for a while”.
He noted that when the statement said the EU would give “preferential access” to its market for US agricultural products including dairy and pork, that phrase can “cover a lot of things” which could go beyond just tariff treatment.
He added that getting market access would only be the first step. Once the US can get product into the EU market, whether it is beef or dairy, then exporters “can build out more to the future, depending on what the market wants,” adding that “companies would think about what they could sell to local markets in various countries.
“It would be more of a demand pull and companies would react to that.”
Flip side
The flip side of the coin for those opportunities for the US is the ability of the country’s farmers to meet that market demand. “We’re at the lowest cattle herd since the 1950s, and we have problems with farmers trying to build back their herds as the price of cattle is so high.”
Persistent drought has also been a factor, particularly for cow-calf operations (suckler herds) which are dependant on grazing. “Some of them went out and they’re just not going to be coming back for a while,” Salmonsen said.
“But it goes in cycles. Back in 2013, we have a few guys working here in this office who left to go home to farm and it’s worked out well for them. The time has to be right, and what it really comes down to is, are the business conditions favourable?”
Speaking of business conditions, Salmonsen said that he thinks there will be a point where there will be certainty about trade between the EU and the US. “I think that at a certain point a deal is done and will be followed. The difference with President Trump and the classic way of doing trade deals is that you will not keep Trump out of the picture and just present him with a final deal from his trade negotiators. He’ll stay involved all the way through and he’ll let [his negotiators] know if he thinks a deal is not good enough.
“This administration is different to other administrations, but they are all trying to get to the same place: A deal that opens up trade.”
He emphasised again the need he sees to remove non-tariff barriers. “The business world will react if you get the government out of the way.”
David Salmonsen will speak at the Agricultural Science Assocation annual conference on Thursday 4 September.
Comment
President Trump has been in a hurry to announce trade deals since he came into office for his second term as US president. The “deal” with the EU agreed at the end of July was very thin on details – a situation not much improved upon by the publication of the joint EU-US statement in recent days.
Looking back at the 2019 beef deal with the US, we can see that even when market access is increased there does not necessarily follow an increase in actual trade. David Salmonsen makes the point that opening markets is only the first step of the process. Customers then have to be found, products have to be developed to match those customers’ taste, and importantly, the product then has to be sold profitably.
Salmonsen sang the praises of Kerrygold’s market penetration into the US, saying that it’s a speciality product that advertised very well. But Kerrygold does not compete on price, and its position in the US has been built up over decades.
The big question for US agri exporters to the EU when they get market access and have the non-tariff barriers which they are so concerned about removed, is where will they find their Kerrygold – the product that they can send across the Atlantic and sell for a price that gives them more profit that which could be achieved in their home market.
They US agri industry could find that getting market access will only be the start of a very long journey, rather than any kind of major victory by itself.
In Brief:
EU-US joint statement thin on detail.Promises preferential access to EU markets for certain US products.Statement described as progress towards a deal.US exporters have not taken advantage of previous deals. Trump’s negotiating style is different, but US farmers’ goals remain the same as always.
The joint statement on transatlantic trade and investment published by the EU and US included undertakings by the EU to offer increased market access to US seafood and agricultural goods.
While the joint statement is far from a completed trade deal, it does give some strong indications of what matters for both sides in the coming negotiations. For the US, it is about market access to EU and the so-called ‘level playing field’. For the EU is seems to be about limiting the damage to exports to the US from increased tariffs.
Looking at the framework overall, it seems that both sides have something to be happy about. The EU limited the damage from tariffs to the higher of either the most-favoured-nation rate – ie the tariff level that has been in place for years – or 15%. While this is not great news, the alternatives mooted by President Trump over recent months would have been considerably worse.
The US gets to have tariffs eliminated on all its industrial goods and an intention from the EU to provide “preferential market access for a wide range of US seafood and agricultural goods”. That last line could send a chill down the spine of Irish farmers as it sounds like a situation could arise where Irish exports to the EU could be directly competing against dairy and meat products from the US.
However, with all such deals, the devil is in the detail. The joint statement published is not a final deal. It says it is a “concrete demonstration of our commitment to fair, balanced, and mutually beneficial trade and investment” and the document itself is littered with words and phrases like “intends to”, “plans to” and “commits to undertake efforts to” rather than give guarantees that anything will actually happen.
Safe to say, there is plenty of negotiating left.
Even if there is an agreement reached in line with what was published last week, we can look at the difference between the advertised intention of previous deals and the actual outcome. During his first term in 2019 President Trump negotiated a trade deal with the EU which would see an increase the quota for hormone free beef imports from the US rise from 18,500t in 2020 to 35,000t from 2026.
Importantly from the EU point of view, the increase in the US quota was made by giving the US a larger share of the global EU beef import quota, rather than increasing the total amount of hormone-free beef that could be imported.
In 2020, the US quota was 18,500t and the rest of the world’ quota was 26,500t, giving a total of 45,000t. The increase to 35,000t for the US by 2026 will see the quota for the rest of the world fall to 10,000t, meaning there would be no net increase in hormone-free beef imports to the EU under the plan.
Despite the announcements about how big an opportunity this was for US beef farmers at the time, the data suggests that the US beef industry has been unwilling or unable to use it (see Figure 1).
Despite the rises in the amount that can be exported from the US to the EU, the quota is barely half-filled each quarter. In 2023, the US had a quota of 27,800t, but only used 13,874t. This left 13,926t of quota unused by the US. As the whole 27,800t was ringfenced for the US, no other nation could take advantage of it, meaning the lack of use by US farmers meant total EU beef imports under the quota were lower than they might have been had the 2019 Trump deal never been signed.
US view
To get a better idea of what US farmers hope to get from the current round of trade negotiations, the Irish Farmers Journal sat down with David Salmonsen who is senior director of government affairs at the American Farm Bureau Federation, the country’s largest representative organisation for farm and ranch families.
Salmonsen said the joint statement was a positive sign as it meant there continues to be progress, and it is part of the process of working towards a final trade agreement.
He said that it while it seemed that the tariff issues had been got past, there was room to “talk about some other issues on products, some of the non-tariff barriers that have been around for a while”.
He noted that when the statement said the EU would give “preferential access” to its market for US agricultural products including dairy and pork, that phrase can “cover a lot of things” which could go beyond just tariff treatment.
He added that getting market access would only be the first step. Once the US can get product into the EU market, whether it is beef or dairy, then exporters “can build out more to the future, depending on what the market wants,” adding that “companies would think about what they could sell to local markets in various countries.
“It would be more of a demand pull and companies would react to that.”
Flip side
The flip side of the coin for those opportunities for the US is the ability of the country’s farmers to meet that market demand. “We’re at the lowest cattle herd since the 1950s, and we have problems with farmers trying to build back their herds as the price of cattle is so high.”
Persistent drought has also been a factor, particularly for cow-calf operations (suckler herds) which are dependant on grazing. “Some of them went out and they’re just not going to be coming back for a while,” Salmonsen said.
“But it goes in cycles. Back in 2013, we have a few guys working here in this office who left to go home to farm and it’s worked out well for them. The time has to be right, and what it really comes down to is, are the business conditions favourable?”
Speaking of business conditions, Salmonsen said that he thinks there will be a point where there will be certainty about trade between the EU and the US. “I think that at a certain point a deal is done and will be followed. The difference with President Trump and the classic way of doing trade deals is that you will not keep Trump out of the picture and just present him with a final deal from his trade negotiators. He’ll stay involved all the way through and he’ll let [his negotiators] know if he thinks a deal is not good enough.
“This administration is different to other administrations, but they are all trying to get to the same place: A deal that opens up trade.”
He emphasised again the need he sees to remove non-tariff barriers. “The business world will react if you get the government out of the way.”
David Salmonsen will speak at the Agricultural Science Assocation annual conference on Thursday 4 September.
Comment
President Trump has been in a hurry to announce trade deals since he came into office for his second term as US president. The “deal” with the EU agreed at the end of July was very thin on details – a situation not much improved upon by the publication of the joint EU-US statement in recent days.
Looking back at the 2019 beef deal with the US, we can see that even when market access is increased there does not necessarily follow an increase in actual trade. David Salmonsen makes the point that opening markets is only the first step of the process. Customers then have to be found, products have to be developed to match those customers’ taste, and importantly, the product then has to be sold profitably.
Salmonsen sang the praises of Kerrygold’s market penetration into the US, saying that it’s a speciality product that advertised very well. But Kerrygold does not compete on price, and its position in the US has been built up over decades.
The big question for US agri exporters to the EU when they get market access and have the non-tariff barriers which they are so concerned about removed, is where will they find their Kerrygold – the product that they can send across the Atlantic and sell for a price that gives them more profit that which could be achieved in their home market.
They US agri industry could find that getting market access will only be the start of a very long journey, rather than any kind of major victory by itself.
In Brief:
EU-US joint statement thin on detail.Promises preferential access to EU markets for certain US products.Statement described as progress towards a deal.US exporters have not taken advantage of previous deals. Trump’s negotiating style is different, but US farmers’ goals remain the same as always. 
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