Minister Jensen, Deputy Minister Seppey, ladies and gentlemen,
I’m very happy to be back in Denmark. Many thanks to COPA and the Danish Agriculture & Food Council for organizing this important event.
This is a timely opportunity to take stock of where we stand on both sides of the Atlantic in relation to agriculture policy, rural development, and trade.
It is in my view absolutely crucial that we maintain an open dialogue between our two continents, particularly in this time of rising political tensions.
Farmer representative organisations and co-operatives understand better than anyone the value of working together, therefore I am confident that you will take full advantage of this opportunity this to strengthen the ties that bind us.
I propose to give you an overview of the main items on the EU agri-food agenda today – and I hope this will be helpful for your discussions.
Let me start with the basics. The top priority for the European agri-food sector is to have a clear budget position and a clear policy agenda for the next life cycle of the Common Agricultural Policy.
Of course, for that to happen, EU legislators need to sign off on the overall EU budget for the next seven year programming period. In sporting terms, you could say we are well into extra time for reaching a deal and it is time to get this done.
We have spent tortuous hours trying to reach an agreement, based on the European Commission’s very strong and very fair initial budget proposal. The ball is now firmly in the court of the EU co-legislators, meaning the EU heads of state and MEPs.
This has been allowed to slide for too long and our Member State administrations, our economies, and our citizens need to know how much money will be available so that they can begin to plan for the future.
The new European Parliament has had its first Committee meetings and it has a busy agenda to get through. Likewise, the Finnish Presidency of the European Council is determined to make rapid progress.
I would remind you that despite the challenging budgetary circumstances, including Brexit and new challenges such as security and migration, the Commission has proposed to maintain a strong budget for agriculture and rural development – 94% of the current budget.
I hope Denmark will continue to play an active role in reaching a speedy European consensus on the budget so that all parties can begin to plan for the future with clarity.
Reaching a budget agreement is also a crucial step in finalising the next life cycle of the Common Agricultural Policy.
This is also now in the court of the co-legislators – they must make the final decision.
Work at European Council level has progressed relatively well, but no final political position could be secured given that different points remain subject to discussion, in particular on the performance-related elements and the new green architecture. And of course Brexit is muddying the picture.
In the European Parliament, MEPs on the new Committee for Agricultural and Rural Development met this month to resume their work towards finding a common position.
They are driving ahead and are working closely with the Environment Committee to find common ground. The consensus is “to continue rather than start from scratch” which is a welcome approach.
The Commission works closely with both the Council and the Parliament and we continue to do our best to support fast progress. I hope that the co-legislators can find agreement early in 2020.
As you know, the Commission’s proposals have been on the table since 1st June 2018.
I am confident that most people in this room are familiar with the broad outlines of our proposal, so I will spare you a detailed recap.
But I will add a short word on the climate and environment ambition which is at the heart of this proposal, and if we are realistic, must be at the heart of all agriculture policy in the coming years. This is true on both sides of the Atlantic and in every other global region.
Let me say that I very much welcome the “Climate Neutral 2050” document produced by the Danish Agriculture and Food Council.
The Danish food industry is taking up the challenge and wants to be climate neutral by 2050. I complement President Merrild on this initiative.
We all know that the agri-food sector needs to do more in the climate and environment space.
This is also a question of responding to our citizens’ wishes, and in so doing, maintaining the political justification for a strong CAP budget going forward.
The EU has made ambitious commitments under the Paris Agreement to reduce greenhouse gas emissions. This resulted in a robust 2030 legislative climate and energy framework, to which all sectors of the economy including agriculture have to contribute.
The incoming president of the European Commission, Ursula von der Leyen, called for a European Green Deal to achieve carbon neutrality by 2050, by further increasing the target for greenhouse gas emissions reduction to at least 50%. Agriculture has to be ready to contribute to this important overarching goal.
The urgency of the climate and environmental challenge has never been greater. The severe drought experienced by many farmers across the EU this summer emphasised the point. Farmers need to reduce emissions but equally they need to adopt new practices and technologies to enhance climate resilience.
The good news is that even if these pathways are challenging, they are feasible from a technological, economic, environmental and social perspective.
The Commission’s proposals for the future CAP and Horizon Europe acknowledge that the environmental and climate challenges remain significant and they see farmers and rural communities as being part of the solution rather than part of the problem.
This is the key to ensuring that our agri-food sector stays ahead of the curve at home.
There is also a clear economic dividend for farmers to adopt more sustainable and climate-friendly production techniques.
Global demand for high-quality, traceable and environmentally sustainable products will grow substantially in the coming years.
This brings me neatly to the question of trade and exports. You will appreciate that I will be keeping a very close eye on these issues for the next few years!
The EU is traditionally the largest importer of agri-food globally and thanks to our efforts in recent years we are now also the most important exporter. In 2018 EU agri-food trade was worth EUR 253 billion.
The EU has been a net exporter of agri-food for 9 years in a row, with a surplus of around EUR 21 billion in 2018.
And may I say that Denmark has made a sterling contribution to this success story. This is an open and outward-looking agri-food economy with a strong history of exporting around the globe.
Overall prospects for agri-food trade are positive: global demand for food is likely to increase due to population and income growth combined with changes in consumer preferences. Europe's agri-food sector stands to gain from these opportunities, not at least because of our good reputation for food safety and quality.
In recent years, the EU has made progress on multiple trade negotiations as well as on the implementation of trade agreements that have already entered into force.
Trade agreements help EU farmers and food producers make full use of their export potential. Our studies show that every 1 billion euro in agri-food exports raises value added in the agri-food sector by €600 million and supports over 20 000 jobs, of which 13 700 jobs are in primary agriculture.
These studies stress the importance of activities that allow EU exporters to expand trade within the existing agreements, such as promotion and information actions and resolving SPS barriers.
Of course agreeing trade agreements is only the first step; the actual success of a deal and the reaping of the benefits that come with it is dependent on implementation by traders, operators and exporters.
The Commission will next month present its annual report on the implementation of existing trade agreements and, without going into details, the report will show that 2018 saw important progress in relation to agri-food trade.
The Commission has for instance worked hard to make progress on SPS issues and removing barriers, for instance by setting up dedicated SPS seminars and trade missions.
This brings me to another point; a point that is becoming more and more important and that is the issue of a level playing field.
I regularly hear that EU farmers are competing with farmers around the world that do not face equivalent standards when it comes to animal welfare, SPS, labour or environmental and climate requirements.
The EU is already now making great strides in creating and maintaining that level playing field, but President-elect von der Leyen will take it even further, making this one of the priorities for the new Commission.
In particularly we will prioritise reform of the World Trade Organisation and emphasise the need to preserve a well-functioning and rules-based multilateral system.
Going forward, trade and trade tools will be deployed to support sustainable development. This will be done by following the example of MERCOSUR and including a chapter on sustainable development in every new trade agreement.
The EU and Mercosur committed to implement the United Nations Framework Convention on Climate Change and the Paris Agreement. The deal prohibits either side from unduly encouraging trade and investment by failing to enforce environmental laws.
Furthermore, provisions on climate, environment and labour protection in future agreements will be closely monitored and enforced by the European Union. For that purpose, the Commission will appoint a Chief Trade Enforcement officer.
Of course we want to ensure that our trading relationship with our North American partners is as strong as possible.
If we look at our CETA agreement with Canada, for example; we can rightfully consider this to be one of the great success stories of this European Commission.
We have negotiated a modern, progressive agreement that brings the benefits of global trade to both parties while enshrining our shared progressive values.
It is a real example of a win-win agreement. While it is still early to assess fully, our preliminary figures on CETA indicate it is working. In 2018, EU goods exports to Canada totalled at over 41 billion euro – an increase of 15% when compared to the previous 3 years.
Or if we look at Mexico, we are continuing to deepen our excellent trading relationship.
Currently, the EU exports 1.45 billion euro's worth of agricultural products to Mexico and imports €1.3 billion.
Mexico ranks 21st among our agri-food import partners and 25th among our agri-food export partners.
Both sides are working relentlessly to improve our existing Global Agreement. We have agreed in principle the modernisation of our bilateral Free Trade Agreement into a brand new Global Agreement.
Finally let me turn to our trading relationship with the land of the free and the home of the brave.
The European Union and the United States are inextricably linked by a solid trade relationship in agriculture.
Our bilateral relationships are also complementary, since the EU exports mainly manufactured agricultural products while the US exports mainly commodities.
And our trade continues to grow! Last year the EU exported 22 billion EUR of agricultural products to the US, while the US exported 12 billion EUR.
The EU, as a firm believer in a WTO-based global trading system, considers that stable and predictable trade relationships are key for economic operators.
For that reason, and keeping in mind the hugely important economic interests at stake, the US administration’s current approach to trade is creating concerns and disruptions. And of course we know that farmers are particularly sensitive to disruptions.
Along with the undermining of the WTO dispute settlement system, this approach will only create losers on both sides.
Our operators on both sides of the Atlantic want us to look for negotiated solutions, not increased conflicts.
The recent conclusion a deal updating the Memorandum of Understanding for export of high quality beef is a clear example of the EU’s willingness to solve issues through dialogue and cooperation.
Furthermore, the approval of the sustainability certification for US soy being used for biofuel production is another example of such a cooperation: a new and very interesting market niche is now open.
On the other side there are other areas where non-tariff barriers hinder EU exports. We are therefore looking for reciprocity – for example the right to export apples and pears to the US.
Finally, ladies and gentlemen, let me say a brief word on Brexit.
The worst-case scenario of a no-deal outcome is still a very real risk. But it is also true that recent events in London give us cause for some optimism.
President-elect von der Leyen has shown openness to granting a further extension to the United Kingdom, provided there is a good reason. In the end, the European Council meeting on 17 and 18 October will hopefully bring more and perhaps decisive clarity.
I believe there are still clear pathways to finding a sensible outcome to this unfortunate situation. With a small bit of give and take, we can still do a huge amount to mitigate the worst risks.
Whatever happens, the European Commission will be ready.
We have left no stone unturned in our preparedness work. Since November 2017, the Commission has adopted 46 legislative initiatives and legal acts, and has published 100 Brexit preparedness notices, covering the full spectrum of economic activities.
The Commission has also adopted 6 separate Communications on Brexit preparedness, including earlier this month. This latest Communication presenting an overview of various preparedness and contingency initiatives.
The agricultural sector is specifically mentioned, recognising that it is among the most affected sectors in case of a no-deal scenario. The Commission also presents the outlines of a financial support package to support those sectors, within the available resources, which are most affected.
In the event of a no-deal BREXIT and given the scale of existing trade between the EU and the UK, there will inevitably be disruption to markets and losses for EU agri-food producers and farmers.
However, compared to the Russian ban, this is not about a complete ban on trade with the UK: where EU agriculture is competitive (and this is the case in many sectors) we will still have access to the UK market.
As you know, the Common Agricultural Policy does provide instruments to deal with market disturbances as well as income losses for farmers.
A wide range of mechanisms can be deployed and this will allow tailored packages of measures adapted to actual market developments of markets. Possibilities also exist with regard to State aid and to help companies to diversify production and seek new markets, for instance.
The Commission is ready to examine further flexibilities in this respect, similar to what was done in the context of previous market crises, for instance in 2016 in the dairy sector.
In conclusion, dear friends, there are many important issues to discuss and this conference is a wonderful opportunity to discuss them.
Maintaining a strong dialogue between North America and Europe is absolutely vital. It is my firm belief that we have nothing to gain and everything to lose by weakening our strong economic and political bonds.
So the challenge for policymakers and representative organisations is to keep our bonds strong in this challenging time. I have great faith in your abilities, and my door is always open if I can help. Thank you.