ENG: The Complex Issue of Mirror Clauses

One of the most common criticisms of the 'Farm to Fork' strategy is that it imposes additional obligations and costs on European producers that do not apply to imported products, leading to unfair competition to the detriment of EU producers and consumers.

The Commission was so aware of the significance of this criticism that it included a chapter in its strategy, 'Promoting the Global Transition,' explaining that EU trade policy must help strengthen cooperation with third countries and achieve the ambitious commitments of its participation in key areas such as animal welfare, pesticide use, and combating antimicrobial resistance: "The Union will strive to promote international standards in relevant international forums and will encourage the production of food produced respecting high standards in terms of safety and sustainability."

However, little progress has been made in this direction and, as we shall see below, there have even been proposals that go in completely the opposite direction to what has been stated. In any case, this is one of the clamours heard at farmers' demonstrations in all European countries.

The asymmetry between obligations and costs that European producers must assume compared to those of third countries is one of the cries heard in these days' demonstrations

The issue is not whether there is an "uneven playing field," which there is. The issue is whether this creates "unfair competition" and, if so, what the European Union can do to address the issue and within what timeframe.

Every move must be made according to the rules of international trade, the international commitments made by the European Union and its member states… and common sense.

The socio-labor issue

This is the simplest issue to address. Labor conditions and wages vary significantly within the European Union itself, from one member state to another. According to the data available to me, in 2023, minimum wage levels ranged from 399 euros in Bulgaria to 2,387 euros in Luxembourg, with Spain and its 1,260 euros in the middle zone, close to France with 1,709 euros. The range is, therefore, from 1 to 6 between the two extremes.

These wage disparities, greater in nominal terms than if we used purchasing power parity, have not prevented the free movement of goods and the proper functioning of the single market.

One of the golden rules of international trade, which we will have the opportunity to return to later, is that you cannot impose on imports from third countries rules that you do not impose on your own producers.

The demand for 'mirror clauses' in terms of wage levels leads us to a dead end. Another matter might be child labor, for example, for which there are international conventions, but this is not what is being discussed here.

The demand for 'mirror clauses' in terms of wage levels leads us to a dead end

A complex political negotiation within the Union

Before getting into the subject, let's address some preliminary issues that need clarification to continue with the presentation. The first refers to the difficulties that member states wanting to achieve a sufficient qualified majority to adopt a decision on the matter will face, assuming the Commission puts a proposal on the table.

Europe is a net exporter of food products. We are talking about some 58,000 million euros in 2023. If we impose new conditions on the products we import, there is a risk that some of these third countries will impose retaliatory measures that, logically, would be focused on the products exported by the member states promoting the initiatives, or on key products of more reluctant member states but with great negotiating power. This could be the case with the exports of industrial products from Germany.

In 2023, Spain had an agri-food trade balance surplus of 14,124 million euros. It is true that the bulk of our sales abroad are shipments to other member states. But our export activity (i.e., to third countries) is important in products like pork and its derivatives, olive oil, and wine.

To this, we must add the port interests, very powerful in member states like the Netherlands but also Belgium, with the port of Antwerp, or Germany with the port of Hamburg.

Last, but not least, geostrategic issues come into consideration. Improving the relationship between Europe and Latin America (in which context the agreement with Mercosur is integrated) has always been an essential priority of Spanish diplomacy since the start of our country's accession negotiations to the European Communities, whether the right or the left govern and whatever the tall tales when one or the other is in opposition.

In 1984, during the course on the European Communities taught (and still taught) at the Diplomatic School, we were fortunate to attend the master class given by the course director, Ambassador Alberto Ullastres. His approach was clear: "The objective of Spanish diplomacy must be to ensure that our former colonies have, within the European framework, an economic, commercial, and political treatment as similar as possible to that of the former French, British, and Belgian colonies."

Morocco is another good example of the geostrategic complexity of trade relations. In a context like that of the Mediterranean, extremely sensitive, Morocco is a strategic ally of Europe and Spain; a key element in controlling migrant and drug trafficking; and also has a fishing bank where many Spanish boats fish.

In the Mediterranean context, Morocco is a strategic ally of Europe and Spain

For this reason, again, whether the right or the left govern and whatever they say when they are in opposition, Morocco is one of the great diplomatic priorities of our country. For this reason, it has always been one of the first countries visited by the different heads of government we have had, and the various ministers of Foreign Affairs and of Agriculture and Fisheries.

As we can see, the political agreement would be neither easy nor obvious.

Respect for the international commitments of the Union

A possible implementation of 'mirror clauses' should be done in accordance with the rules of international trade, sponsored by the World Trade Organization (WTO).

For better or worse –I consider it for the better– Europe is not like the United States in this matter, which is willing to break the global trade rules when it suits them. The case of barriers to the import of black olives is a good example of this.

Mirror clauses are not impossible, but they must be duly justified, proportionate, and related to obligations imposed on European farmers, respected, and controlled.

In the case of a WTO panel, the burden of proof that the obligations have been imposed and, above all, respected, controlled, and sanctioned for possible non-compliance would fall on the European Union.

As we will see later, proving the above would also be neither easy nor obvious.

Maximum residue limits

Maximum residue limits (MRLs) are a good example of what we have just written. In principle, when a phytosanitary substance is no longer approved at the European level, the MRL should be reduced to the detection limit, which generally corresponds to the absence of detectable residues by standard analytical methods (default value of 0.01 mg/kg).

We say "in principle" because the European Commission can increase this MRL if the risk assessment concludes, to facilitate the needs of international trade, that no unacceptable effect is observed for food exposure.

The case of glyphosate can serve as an example. It is used as a desiccant up to four days before harvest in Canada (a practice not authorized in Europe). The accepted MRL for lentils was multiplied by 100 between 2008 and 2012 to reach 10 mg/kg, while the one proposed by the Codex is 5 mg/kg; and the MRL applied in Canada is… 4 mg/kg.

"Exceptional" uses

The situation is particularly complex in the case of fruits and vegetables, due to the "minor uses". There are substances and products that are authorized for use in other agricultural productions, but not for fruits and vegetables. For example, the use of ethephon is allowed for wheat, tobacco, or rice with an MRL of 2 mg/kg, but not for fruits and vegetables. This situation is often the cause of the "exceptional authorizations" (often repetitive) granted by the member states.

Registering a phytosanitary product is a costly process. It is not profitable for many companies to make the human and economic effort to prepare a dossier for these minor uses. In other cases, there are no alternatives, because private research has no economic interest in the subject due to a lack of expected profitability. If this is the situation, we are facing a market failure. Therefore, it corresponds to public research or public funding to correct this failure.

If the product can be used "exceptionally" by the European producer, it can also be used in third countries. If the MRL is set "normally" at the detection level, it should also be able to be adjusted "exceptionally" for imported products.

More stringent conditions cannot be imposed on imported products than those applied to European producers. This case of "exceptional authorizations" can be a real Trojan horse against a more rigorous approach. Sufficient investments must be made to reduce the number of authorizations granted and open a registry of these authorizations for third countries.

More stringent conditions cannot be imposed on imported products than those applied to European producers

Poor control

Another weakness of the European position lies in the degree of internal control that member states apply to their producers. In 2020, French Senator Laurent Duplombur prepared a report that concluded that in Europe, about 900 substances (out of the 1,488 that should be controlled) are almost never controlled.

The precedent of hormone-treated meat

We continue talking about residues that would be present in the imported product. There is an important precedent, which is the European ban on importing meat treated with three growth hormones.

After losing two panels at the WTO, this international organization authorized the United States and Canada to impose annual sanctions on the European Union (in the form of tariffs) worth 116.8 million dollars and 11.3 million Canadian dollars. European foods made with beef and pork, Roquefort cheese, chocolate, juices, jams, tomato preserves, and truffles were affected by these sanctions. After 20 years of conflict, an agreement raised the quantity of quality beef imported under preferential conditions to 48,200 tons.

The ban on imports of hormone-treated meat was well received by the European public, despite trade tensions and sanctions. It could be a precedent for the ban on importing meat with antibiotic residues when used not for veterinary reasons but to increase the performance of the feedlot.

In Europe, the use of veterinary drugs is regulated, as is the use of antibiotics. Their use for growth-promoting purposes is prohibited, although they can be used when there is a therapeutic indication, and when there is an infection and the animals have to be treated.

Antibiotic resistance has become one of the main global public health problems. This is confirmed by a study published in The Lancet, which points out that it caused more than 1.2 million deaths in 2019, while more than 4.9 million people died from indirect causes related to antibiotics.

Products that leave no residues

Certain products used in the agricultural process may leave no residue in the final product, which is the subject of importation. In this case, there is another recent precedent, which is the requirement for a series of imported products to be accompanied by a certificate that they have not contributed to deforestation.

Approved in 2023, it mainly affects palm oil, beef, soybeans, coffee, cocoa, wood, and rubber, as well as their derived products and will be fully in force from January 1, 2025.

The European Union has justified its regulation on the fact that 110 countries around the world committed in 2021 to stop massive logging and curb global deforestation by 2030. Despite this, several third countries are seriously considering filing a complaint with the WTO to provoke the opening of a new panel on the matter.

In the vast majority of cases of the use of products that leave no residues in the final product, there is no such international legal coverage.

Some reflection and advancement clues

The reader who has had the 'patience' to reach this point may get the impression that then nothing can be done. We want to end our article by proposing some reflection and advancement clues. It is necessary to differentiate what can be proposed in the medium and long term and what could, if there is the corresponding political will, be implemented more quickly.

In the medium and long term

Within the framework of bilateral agreements, it is always possible to renegotiate them to reach an "improved" agreement. For this, our partners must obtain concessions to compensate for the tightening of the conditions for access to the European market. Clearly, this means an increase in quotas and/or a reduction in residual customs duties if they exist and/or (if applicable) an extension of the annual period to which they apply.

In the multilateral framework, this means renegotiating the rules at the WTO and/or in the Codex Alimentarius. These negotiations are complex. In fact, the Commission has already started, but we must be aware that it will take time to obtain results that will be uncertain.

In both cases, we must be aware that many third countries have limited physical, budgetary, and human resources to carry out the controls we can demand. Third-party certification is always an option, as has been done with deforestation, but even this is not without problems.

Communitarize controls related to "one health". There is a precedent, and it is not favorable. In the 1996 reform of the Common Market Organization for Fruits and Vegetables, which established producer organizations as we know them today, a community control body was created to strengthen the operational capacity of the member states and ensure a similar level of control throughout the Union territory.

After some stammering, the idea was abandoned. No (and when I write 'no' I mean none) member state wanted real transparency and authorize someone to come and stick their nose in their national little kitchens. No one said it in these words, but together they killed the community control body, and it died on its own.

Anything that improves coordination between national customs and control bodies (starting within the Spanish state with the autonomous communities) is obviously in the right direction.

More in the short term

A bit of coherence: despite having marked the European Green Deal as the Commission's roadmap, despite the good intentions we have mentioned in the introduction, the Commission proposed increasing the maximum residue limit (MRL) of tricyclazole in rice, an active substance whose use has been prohibited in the European Union for several years. This proposal was experienced as a real provocation by the sector and was eventually overturned by the European Parliament.

Prohibited products could have an MRL at the detection level, that is, in practice with current techniques practically zero. This would force an increase and significant improvement in controls both at the borders of the European Union and for our producers.

We can strengthen our import health protocols, as long as we have good health reasons for doing so. This is how many third countries proceed with exported European products.

The "one health" concept means that we must also give full priority to plant and animal health. Even with repeated alerts, such as the very recent ones related to South African oranges or Turkish lemons, Spanish citrus producers know that progress can be made on this path, but resistance is strong.