Record export performance from food industry strengthens the EU economy

Surge leaves block with €21bn positive trade balance – highlighting scale of challenge for UK

A positive balance of trade gap between exports and imports is generally seen as one sign of a healthy economy.

On that basis, the EU’s economy is being boosted by a record export performance by the food industry.

Exports surged in the 12 months to the end of January, leaving the EU with a healthy 21 billion euro positive trade balance in agri-food.

The United States was the biggest market for growth, followed by Russia, Japan, China and Korea. The EU is now well established in these markets, which are also high on the target list for the UK seeking post-Brexit trade deals.

The success of the EU underlines the scale of that challenge, not least because in new trade deals Brussels offers access to a market of more than 500 million people, while the UK offer is 60 million.

The latest trade spat between the United States and China underlines the volatility of the global food market.

In retaliation to threats of antidumping duties on Chinese steel by the Trump administration, China has identified possible products for retaliation. This list is focused on key agricultural exports and includes pork and soya.

China takes 60% of US soya exports, and this is the market for almost a third of the crop grown in the US. If implemented, this could be good news for other countries.

China needs to import these products, creating an opportunity for European pork, which had been squeezed out by lower-cost supplies from the US.

The impact on the EU’s need for imported soya is less certain, if South American supplies go to China.

The EU with its demand for GM-free ingredients could not turn to the US.

The Trump administration has said it will press ahead despite criticism from the farming lobby in areas that voted solidly for Trump in 2016.

The EU is often accused of having conflicting policies. A thinktank, Farm Europe, has claimed that as the European Commission launches an ambitious plan to reduce reliance on imported soya, its own policies are undermining protein production in Europe.

This is based on research into events since the last CAP reform in 2013.

The report says that by switching away from support for crop-based biofuel production, because of social concerns about land being used for fuel instead of food, the EU will lose access to more than 13 million tonnes of protein available for livestock as a by-product of fuel production.

It also says that while the initial decision to encourage protein crops on ecological focus areas as part of greening was a good idea, this has been undermined by banning pesticides on this land.

Farm Europe says this means that even with its new protein policy, the EU is more likely to go backwards than forwards in reducing its import dependence.

Getty Images. Picture: China may look to impose tariffs on key agricultural products which the US exports, such as soya.