As President Obama seeks giant free trade agreements with Asia and with the European Union, food trade issues are expected to present difficulties. Obama hopes to sign an agreement with Europe by 2014.
Food import and export can cause deep rifts due to the sentiments attached to the industry locally and nationally. Consumers can be wary of food that is not sourced locally, or whose origins are murky. The recent horse meat scandal has highlighted problems that occur when the supply chain is too complicated, which can happen in international trade that passes through many hands. EU regulators will likely bring up issues of genetically modified food during the talks as well.
The EU has protective tariffs on foods, roughly 18 percent on average, and the single largest expense on the EU budget is made up of subsidies for farmers. Needless to say, the removal of these will cause a reaction from the agricultural sector. For its part, the U.S. also has subsidies for dairy and sugar that it will have to revisit during the talks.
EU trade commissioner Karel De Gucht says the talks are focused on "the future" and creating a strong market between the U.S. and the EU, rather than any particular issue related to food.
An agreement would be a big victory for President Obama, who is striving to take greater steps to revive the U.S. economy.
