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Regional Trade and Food Industry Interests

Regional Trade and Food Industry Interests. Ken Roberts Mondelēz International. we offer many of the world’s favorite brands. fast facts. net revenues of $35 billion in 2013 products marketed in 165 countries #1 in biscuits, chocolate, candy & powdered beverages * #2 in gum & coffee *

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Regional Trade and Food Industry Interests

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  1. Regional Trade and Food Industry Interests Ken Roberts Mondelēz International

  2. we offer many of the world’s favorite brands

  3. fast facts net revenues of $35 billion in 2013 products marketed in 165 countries #1 in biscuits, chocolate, candy & powdered beverages * #2 in gum & coffee * over 100,000 employees donated more than one billion servings of food since 1997 * Source: Euromonitor market share

  4. Backdrop to TTP and T-TIP • Regional trade growth in a globalized world • GATT established 1994, twenty years of change • Basis arms length transactions, unrelated parties • Single undertakings, rounds of multilateral negotiations • Over 300 Regional Trade Agreements (RTA’s) today • 90% increase since 1994 • Lower trade costs led to global value chains • 80% trade transactions are firm driven • Environment more transactional, work around barriers

  5. Pros and Cons of RTAs PROS • Trade facilitating, bring economic and political integration • Freer flow of goods and services, risk diversification • Consumers, manufacturers benefit from lower prices • Better producer export opportunities CONS • Competition leading to trade frictions, trade remedies • Trade diversion, confusing rules of origin • Behind the border costs increasing • Preference erosion, undermining multilateral system

  6. Regional Trade Agreements expansion [ 1975] Source: IDB Integration and Trade Sector based on INTrade.

  7. Regional Trade Agreements expansion [ 1995] Source: IDB Integration and Trade Sector based on INTrade.

  8. Regional Trade Agreements expansion [ 2014] Source: IDB Integration and Trade Sector based on INTrade.

  9. …rise of global value chains in world trade… Percentage of Exports that are Part of a Multistage International Production Process (average 2003-2010) Source: Blyde (forthcoming ). The International Fragmentation of Production: Latin America and the Caribbean in the Era of Global Value Chains .

  10. Share of World Trade Covered by RTAs(1960-2010, in percent) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Source: IDB-INT based on COMTRADE import flows and INTrade RTA dummies.

  11. Partners in RTAs worldwide…(1960-2012) 300 South-South 250 North-South North-North 200 150 100 50 0 Source: IDB-INT based on WTO RTA database.

  12. Strengthening the Multilateral Trading System: TheRise of RegionalismE-15 InitiativeAntoni EstevadeordalManagerIntegration and Trade Sector Inter-American Development BankCSIS – Washington – May 12, 2014

  13. Trans-Pacific PartnershipNegotiations (TPP)

  14. Core TPP Principles Agreed By The Food and Agricultural Sector • TPP agreement must cover all elements of trade and investment. • There must be no product or sector exclusions, including in agriculture. • All tariffs and other market access barriers must be phased out by the end of the negotiated transition period. • Risk based scientific decision making, regulatory convergence, and equivalence are critically important. • Obligations that go beyond those in the WTO must be subject to TPP enforcement provisions. • The agreement must be a single undertaking.

  15. Negotiating Groups of Interest • Agricultural market access • Competition/SOEs • Cooperation and capacity building • Customs • E-commerce • Environment • Financial services • Government procurement • Industrial goods market access • Intellectual property • Investment • Labor • Legal issues • Rules of origin • Sanitary and phytosanitary (SPS) measures • Services • Technical barriers to trade • Telecommunications • Textiles and apparel • Trade remedies • Horizontal issues (competitiveness, development, regulatory coherence, SMEs)

  16. Outstanding TPP Issues of Interest • Ag market access crux of negotiation • Treatment of sensitive products remains key • Differences over intellectual property and environment • Customs provisions could improve trade facilitation (behind the border inefficiencies) • Rules of origin for sugar containing products

  17. SPS Rules • WTO-plus provisions • Science and risk analysis • Assessment: Better definition; more detailed requirements • Management: Least trade restrictive option • International standards • Border checks/laboratory testing • Frequency and nature of checks • Testing: 1) confirmatory test; 2) appropriate facility; 3) validated test methods • Transparency (notice & comment; implementation) • Positive USG response/development: Enforceability

  18. Market Access • Obstacles to comprehensive tariff liberalization • U.S. proposal on “yarn-forward” rules of origin for textiles; Vietnam strongly opposed, withheld offer on sensitive agricultural items • Insufficient U.S. offer on sugar to Australia • Japan’s five sensitive products – rice, wheat & barley, beef & pork, dairy, sugar & starch • Canada’s wait and see attitude toward dairy and poultry • Non-comprehensive market access would disappoint many in ag and food industry, threatening Congressional passage • Resulting in limited access to Japan, Canada and Vietnam • Poor precedent for TPP expansion (China) and TTIP

  19. Transatlantic Trade and Investment Partnership (T-TIP)

  20. Ag and Food Industry Priorities for T-TIP • Must be comprehensive, no product or sector exclusions, and be a “single undertaking” • Elimination of all EU import duties and in the shortest time period possible. Antidumping measures eliminated to avoid “back door” tariff barriers. • Science-based decision making • Strengthen and elaborate requirements regarding risk assessment and risk management • Require parties to provide an adequate grace period before implementing new, non-emergency measures

  21. Ag and Food Industry Priorities for T-TIP • Reinforce WTO rules requiring regulators to select the least-trade-restrictive of available risk management options. • Develop agreed-upon lab testing protocols • Enhance transparency through timely notification of all new measures • Develop effective dispute settlement mechanisms to ensure swift resolution of current and future SPS and TBT trade barriers • Rapid Response Mechanism (RRM) to provide swift private sector notification of shipment issues and non-binding and public expert review

  22. Outstanding T-TIP Issues of Interest • Market access treatment • Regulatory cooperation • Coherence of food safety requirements • Ingredient requirements • Geographical Indicators (GI’s) • Animal welfare

  23. Global Issues of Mutual Interest • Public health priorities targeting obesity and malnutrition • Transparent and inclusive process by governments • Scientific basis for policy changes • Ingredient restrictions and selective taxes • Labeling modifications, front of pack, nutrition facts panel • Advertising to children • Sustainability • GMO’s

  24. Questions or Comments

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