July 25, 2011

 

US seeking deal with EU on soy export certification

 

 

US officials have travelled to Brussels to discuss the EU's new restrictions on soy used in domestic biofuel production, which the US soy industry claims is unnecessarily burdensome for US soy exports.

 

Dr Islam Siddiqui, chief agricultural negotiator the Office of the US Trade Representative (USTR), and USDA Acting Undersecretary Michael Scuse were expected to meet on July 20 with European Commission officials regarding the Renewable Energy Directive (RED), hoping to secure a deal that will allow US soy exports to continue flowing to the EU uninterrupted.

 

The directive, published in April 2009, requires that raw materials for biofuels, such as soy for biodiesel or sugarcane for ethanol, be certified as "sustainable" in order for domestic fuel producers to be able to fulfil energy mandates.

 

EU member states were supposed to have transposed it into law by December last year, though the majority are still in the process of doing so.

 

The US has not agreed to any certification system officially or on an industry-wide level, and US soy industry sources warned that the directive will hurt their access to the EU market.

 

Speaking at an ASA-hosted event recently, Dr Siddiqui said that "for us to be asked to be certified makes me concerned," and he claimed the US has been a "leader in sustainability and conservation."

 

USTR officials did not give details of how the US would seek to secure a deal, and US industry sources familiar with the issue would not comment on strategy.

 

The American Soybean Association (ASA) earlier this year said it was seeking a suspension of the RED's implementation until there is a better understanding of how individual member states plan to transpose it into law. The European Commission has balked at that proposal, saying its job is to ensure that the directive is implemented "in a timely manner".

 

ASA has also explored the possibility of encouraging the US to launch a dispute at the World Trade Organization to challenge the directive, according to one industry source, who said such a case could be based on charges of a "national treatment" violation and a violation of the Technical Barriers to Trade commitment not to be more trade restrictive than necessary in pursuing legitimate goals. He did not give specifics.

 

The US soy industry maintains that the US government has its own sustainability measures in place and that the RED simply adds a layer of unnecessary paperwork, duplicating existing US requirements.

 

One US industry source acknowledged that without an agreement between the US and EU, European biofuel producers could start "shifting" toward using soyoil from South American countries, primarily Brazil and Argentina.