A new trade agreement between United States and Switzerland bodes well for producers here and for consumers there, but its ultimate value goes beyond just dollars and euros.
The United States and Switzerland signed a new trade agreement that proponents claim would facilitate trans-Atlantic trade and “open up the European market to the U.S. organic food industry.”
In answer to that, industry insiders might note that the United States had signed an organic equivalency pact with the European Union back in 2012, so what’s the big deal?
For starters, Switzerland is not a member of the EU, so the lack of an agreement with that country had created a bottleneck in terms of buying and selling food ingredients and organic products. More importantly, the agreement allows organic products certified either here or in Switzerland to be sold as organic in either country.
Right now, food processors in the EU and in the United States often source organic ingredients from Switzerland, such as chocolate and milk powder, which are then shipped overseas, processed into organic food products and then exported back to Switzerland.
The pact eliminates the current requirements for two sets of fees, dual inspections and parallel documentation, the elimination of which is the primary justification for signing such trade deals in the first place.
Second, the size and scale of the organic market in Switzerland is not to be underestimated. Of all the countries in the EU, the residents of Switzerland are the world champs when it comes to per capita consumption of organic foods. In fact, the latest data show a 12% jump in consumption of organic foods from 2012 to 2013, making the Swiss appetite for organic foods a $2 billion market.
In fact, the Swiss consume the most organic foods per person of any country in the entire world, according to Bio Suisse, a trade group organization representing the country’s organic sector. Importantly, the biggest annual increase in organic sales were meat, cheese fruit and processed foods.
A growing marketplace
This new trade pact facilitates opportunities for organic producers, dairy operators and food processors to capitalize on a marketplace that embraces organic foods. Even as U.S. sales of organic foods are approaching the $40 billion mark, according to the Organic Trade Association — with regular double-digit annual increases — finding favorable export markets is critical to all American producers, farmers and processors.
The United States already has trade deals with numerous countries to facilitate exports of U.S. organic foods, including Canada, Japan, and Korea. Canada and EU are the U.S.'s two most valuable organic trading partners, but opening up the Asian market to U.S. organic food producers over the past few years has been essential. Thanks to those and other trade deals around the world, U.S. export sales of American organic products reached $3.2 billion in 2014.
Symbolically, the Swiss population has a deserved reputation for prizing purity and wholesomeness in the food products they consume.
For American meat and dairy producers to claim a significant share of Swiss organic food purchases has positive marketing, as well as economic, value that extends well beyond the projected dollar value of the deal.
Understandably, many people have concerns about trade agreements and their potentially negative impact on U.S. jobs and the economy.
This deal is one that is positive for both countries, and especially for American producers.
Dan Murphy is a food-industry journalist and commentator