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By Melody Meyer
In late May, the European Council adopted new rules for organic production and labelling of organic products. As a result, existing trade arrangements must be exchanged for trade agreements for all countries doing business with the EU.
If you are currently exporting to or importing from the EU it’s important to get engaged in the process now before the rules affect your business. In 2016, the global organic market was $89 Billion. Over 178 countries have some organic activity within their borders resulting in 87 unique organic standards that govern organic production.
Because there are so many different regulations, equivalency arrangements have been put into place to help facilitate global organic trade.
What is an equivalency arrangement?
Very simply, it’s a tool to help open markets and reduce trade barriers. An equivalency arrangement says the organic standards of one country are just as good as or achieve the same end results as partner country.
Equivalency allows products to flow back and forth smoothly without duplicate certification.
These arrangements happen after an arduous and meticulous review of both countries standards.
The US currently has five bilateral equivalency arrangements with Canada, Japan, South Korea, Switzerland and the EU.
The EU is an important trade partner
The US is by far the largest market, commanding 47 percent of global retail sales, with the EU c in second place at 36 percent of all global sales.
According to FAS trade data lettuce, berries, carrots, apples, asparagus and onions are the leading items being exported from the US into the EU.
Lettuce - one of the leading US exports to the EU.
Where are the key changes?
Among changes to production rules, livestock requirements and inspection protocols, it is trade and import is where things get interesting for US traders.
Under the new rule there will only be two ways to get your products into the EU: 1) get them certified to EU standard, or 2) the US must enter an organic equivalency agreement – not an arrangement.
All existing arrangements must be renegotiated as a trade agreement and this will take an act of Congress to execute. It will no longer be under the prevue of the USDA as it has been in the past.
What’s the timeline?
Official regulations have been adopted and they are published in the EU gazette (think federal register). The new requirements will be implemented on January 1st, 2021
A new US Trade agreement MUST be implement January 1st, 2026 or trade will absolutely stop.
Who will manage these changes?
The Organic Trade Association (OTA) plans to shepherd the process. They will gather input from organic exporters and importers and hold meetings with other EU trade associations to ensure that everyone is working on the same list of issues.
In late 2019 OTA will conduct a side by side comparison of the NOP and the new EU regulations.
Once done we must muster up our political will to get an agreement passed in Congress!
OTA members will likely convene a task force to deal with the process as it unfolds. If you are interested in being involved reach out to info@ota.com.
Shipping vessel getting ready to ship goods internationally.
What about Brexit?
The organic regulations are just one detail out of 1,200 that must be worked out. It’s assumed that UK will use a carbon copy of what the EU adopts, and they will in turn have an agreement with EU. At that point the US will have to adopt a separate agreement with UK.
Time to get moving on EU changes.
No one wants trade to be disrupted so it’s in everyone’s interest to have a good plan in place to maintain the flow of organic goods.
This change won’t have an impact to the existing arrangement until 2026 and that might sound like a long-time form now but it’s not! There is much work to be done before that date.
