What China's organic equivalency agreement means in the U.S.

Although the trade waters separating the United States and China are murky, the road has been cleared for getting more European organic products onto U.S. retail shelves. On Feb. 15, the U.S. and the European Union entered into an organic equivalency agreement that mutually recognizes each nation’s organic standards. Under the agreement, products can be marketed as organic without having to be recertified to U.S. or E.U. standards. The United States and Canada also enacted organic equivalency in June 2009, and Canada is now the United States’ largest trade partner.

“This [U.S.-E.U.] agreement between the world’s two largest organic-producing markets is truly a game changer for America’s blossoming organic industry,” wrote U.S. Agriculture Deputy Secretary Kathleen Merrigan in a blog post dated Feb. 22. She also noted that the U.S. government is working to establish similar partnerships with Japan, South Korea and Mexico.

Organic trade experts are eager to see how the new E.U. equivalency will affect U.S. retailers. “I think we will start to see additional products coming to market—especially those that have a terroir [geographic] association, or appellation, with them, such as Parmesan and prosciutto,” says Bob Anderson, senior trade advisor to the OTA and a former organic farmer who served as chairman of the inaugural National Organic Standards Board. “We’ll also see access to more [organic] produce.” But Anderson says organic retailers will have to wait out the European economic crisis—and its global impact—to know how the new equivalency status will impact pricing. 

Hot on the heels of U.S.-E.U. equivalency, China’s Organic Food Development Center announced in July 2012 that the country is also negotiating a mutual recognition program with the E.U. But don’t hold your breath—such negotiations can take years, if not decades.

“Political and other disputes tend to wash over into the international trade arena,” Anderson says. “So even if both countries had political will to do an international trade agreement, it can be easily derailed. These are very sensitive discussions.”

Does that mean an equivalency agreement between the United States and China—or Japan, India or Mexico, for that matter—is out of the question? Not necessarily, Anderson says. “It’s fair to say that where there are emerging middle classes, ultimately, there will be conversations with those countries.”