Sometimes there is a disconnect between domestic and international agricultural policy, and it is important to note that this problem is not unique to the United States. Negotiations on the Transatlantic Trade and Investment Partnership (T-TIP) between the United States and the EU may begin as early as June. Negotiations on the Trans-Pacific Partnership are well advanced. At the same time, both the United States and EU are engaged in review and revision of domestic farm legislation that may have significant implications for pending and projected trade agreements. It is important for policymakers in both the United States and the EU to keep the international picture in mind as they tackle controversial issues.

This will be difficult. Farm policy is as contentious in the EU as in the United States. In Europe, for example, farmers and their trade associations are currently up in arms over the surprise decision to allow the Common Agricultural Policy (CAP) direct payments for 2013 to be cut by 4.98 percent, an automatic cut that follows the “financial discipline mechanism” of the EU budget. Copa-Cogeca, the EU-wide organization representing European farmers and cooperatives, says that this late cut comes after farmers have done all their financial planning for 2013 and will create hardships for many. They say that the 40 million people employed in agri-food in the EU could also suffer as a result.

At the same time, negotiations began on April 11 between the European Parliament, European Commission and member nations on changes to the CAP. The members of the European Council have agreed on prospective changes, including a capping of direct payments to farmers, but the changes must now be translated into legislation. It will be no surprise to longtime observers of U.S. Farm Bills that criticism is flooding in from all directions. Eligibility for direct payments has been a particular problem, and the definition of “active farmer” is tricky, as in the past, direct payments have often flowed to industries including mining, transportation, real estate, airports, sports clubs, and camp grounds that are not generally considered to be in the farming businesses.

Environmental issues are another area in which U.S. farmers can probably identify with some of the frustrations of their European counterparts. The proposed CAP revisions would require farmers with more than ten hectares to establish a three percent “ecological focus area,” with the set aside rising eventually to seven percent. Naturally, definitions and details can get complicated, as non-farming areas such as fallow land, terraces, hedgerows, ditches, stone walls, trees ponds, buffer strips and more can qualify as part of the focus area. In a further interesting twist, farmers will be able to plant within the focus area provided that they don’t use any pesticides or fertilizers.

In general, European agriculture is intensively regulated to achieve a broad range of social and environmental objectives that significantly increase production costs, and European farmers are heavily subsidized to offset these costs. This raises very difficult questions about when such subsidies are appropriate compensation for legitimate social costs, versus trade distorting subsidies that function to box out import competition. The use of sanitary and phytosanitary regulation as non-tariff trade barriers is another longstanding issue. With T-TIP, CAP reform, and a U.S. Farm Bill all on the 2013 agenda, the trade policy arena is getting crowded, and complicated indeed.