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Food & Ag Policy Briefing: EU-Mercosur deal agreed, FDA under pressure on CBD and gene editing

Also last week, far right MEPs push for agriculture committee chair, liberals eye environment

After 20 years of negotiations, the European Union and Mercosur group of Latin American countries late last week (June 29) finally reached a political agreement on a trade deal that will create the world’s biggest market for goods and services by population size.

At a time when concerns over protectionism in global trade are on the rise, with tensions between the United States and China among other issues, European Commission President Jean-Claude Juncker hailed the deal as “a strong signal with our Mercosur partners that we stand for rules-based trade.”

The agreement, which will eliminate around €4 billion worth of duties each year, will see farmers in Brazil, Argentina, Uruguay and Paraguay gain considerable access to the European market for agri-food goods for products such as beef, sugar and ethanol, much to the despair of various EU farmer groups.

EU exporters, meanwhile, will benefit from the slashing of high tariffs on products such as chocolates, wines, spirits and soft drinks, while there will be tariff-rate quotas for dairy products, notably cheese – although dairy producers are said to be dissatisfied about what has been agreed

Also, 357 EU geographical indications will be recognised by the Mercosur bloc, including Tiroler Speck (Austria), Fromage de Herve (Belgique), Münchener Bier (Germany), Comté (France), Prosciutto di Parma (Italy), Polska Wódka (Poland), Queijo S. Jorge (Portugal), Tokaji (Hungary) or Jabugo (Spain).

Full details of the exact offers within the deal have yet to be disclosed but IEG Policy will publish them, along with reaction, as soon as they are available.

The EU-Mercosur trade agreement will still need to be ratified by the respective parliaments in Mercosur, as well as the European Parliament, European Council and national member state parliaments.

French President Emmanuel Macron has already warned that he will not sign off the deal should Brazil’s President Jair Bolsonaro pull his country out of the Paris Agreement on climate change, which he has previously threatened to do.

Far right and liberals vie for key ag roles

Elsewhere in Brussels last week, the newly formed Identity and Democracy (ID) group within the European Parliament kicked off its bid to chair the influential Agriculture Committee, while the liberal Renew Europe group has set its sights on the Environment Committee chair.

The far right wing ID was formed following the European elections, replacing Europe of Nations and Freedom, and is now the fifth largest political group with 73 MEPs. It is pushing to chair both Agriculture and Legal Affairs.

The key question now is whether the other groups choose to place a ‘cordon sanitaire’ around ID and refuse to sanction the group holding the ComAgri chair.

Added to that, a committee’s chair and vice chairs are elected at the first constituent meeting, which for ComAgri is July 22 to 23.  ENVI has its constituent meeting on July 8. Committee members do not have to stick to the informal deal thrashed out on chairs and can vote down the candidate.

It is almost certain that the Socialists and Democrats (S&D) and European United Left/Nordic Green Left (GUE) would vote against an ID chair, with the European People’s Party (EPP) and Renew Europe, the new name for the liberals, also likely to block a far right candidate.

However, under the d’Hondt points system, the group from which the alternative chair came would lose out on other positions, so it will be a delicate balancing act.  Any vote against could also leave the two committees involved short of a chair.

FDA urged to act faster on CBD

In the Unites States, the 2020 budget bill for the FDA includes language that will direct the agency to expedite its efforts to approve use of CBD in foods and dietary supplements.

The measure provides $100,000 for FDA "to undertake a process to make lawful a safe level for conventional foods and dietary supplements containing CBD so long as the products are compliant with all other FDA rules and regulations."

The language is a bid to pressure FDA to take action on CBD amid growing frustration from food and dietary supplement manufacturers about the lack of federal approval from FDA for the non-psychoactive cannabis ingredient and the patchwork of state laws.

Millions of Americans have already decided they want CBD in both food and supplements and the size of the market is increasingly hard for companies to ignore.

Senator Ron Wyden (D-Ore.) also ramped up the pressure later in the week, calling for the agency to issue enforcement discretion guidance by as early as August 1 this year.

Wyden said while he appreciates FDA faces challenges with CBD regulation, the agency's indication that it may take three to five years to issue a final rule is "fully unacceptable."

FDA considers CBD food products and dietary supplements illegal because it has approved use of CBD as an active ingredient in an epilepsy drug.

Some states embrace the use of CBD in food and supplements, while others prohibit it and others essentially turn a blind eye to a market that topped $200 million last year.

FDA says its biggest concern is products that are making therapeutic claims and the agency has taken action against a handful of such products, but officials say they don't have a policy of enforcement discretion.

Wyden says FDA should have such a policy and suggests the agency issue it by August when USDA is set to release its interim hemp production rule.

"Absent formal enforcement discretion guidance, hemp producers and their customers will continue to be left in a regulatory gray zone," he said, adding that USDA's hemp rule will give farmers a measure of certainty and allow states to license more growers.

Gene-edited animals

FDA has also come under fire from the US pork industry. It has urged the USDA to take charge of oversight of gene-edited animals, arguing that the FDA’s current regulatory framework is impeding the use of new breeding technologies.

Officials with the National Pork Producers Council (NPPC) said President Donald Trump's recent executive order to streamline federal biotechnology rules appears to have fallen on deaf ears at FDA and contend the agency has little interest in overhauling its regulations.

"I don't believe the executive order has changed their minds or approach," NPPC Science and Technology Counsel Andrew Bailey told reporters on a conference call.

FDA regulates all genetically engineered animals – including those made with new gene-editing tools – as new animal drugs, a regime critics say has made it virtually impossible for biotech developers to bring gene-edited livestock to market.

As a new animal drug, gene-edited animals are subject to expensive multiple generation safety and efficacy studies that biotech advocates say are unnecessary.

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