The EU-USA Organic Equivalency Agreement that allows EU member state producers to sell their products as organic in the U.S. with local EU organic standards and without mandatory USDA NOP certification has been welcomed by EU officials and exporters. However, an unintended consequence is that less EU organic ingredients producers will certify products to the USDA NOP standard that will create a shortage of these ingredients available to intending U.S. exporters in third party countries.

The EU-USA Organic Equivalency Agreement that came into force on June 1 was expected to offer increased market access and new export opportunities for both sides in fresh and packaged organics, lower certification costs and cut bureaucracy, while benefiting the growing organic industry and supporting jobs and businesses on a global scale.

Director of Reut, Israel-based organic raw materials and ingredients supplier R.B. Capricorn International Enterprises Eric Bar-Chen believes the main advantages of the new agreement are only to countries in the EU or the USA, and for other countries, there may turn out to be more problems than advantages, although this is not the intent of the agreement.
“The agreement states that EU certified items imported to the USA are accepted as equivalent to NOP only if they are produced in the EU and exported from there to the USA. The same applies in the other direction for NOP items that will be accepted as equivalent to EU,” he said.

“The problem arises with third country production. Many countries around the world produce to either EU or NOP standards and even though their products are certified, in many cases, by the same agencies that certify products produced in Europe or the USA, they will not benefit from the equivalency agreement as they are not in either the EU or the USA.

“Furthermore, as brokers who supply organic ingredients to countries around the world, we have found that obtaining NOP certified ingredients in Europe which can be exported to third countries who manufacture finished products that are exported to the USA is becoming increasingly difficult.

“The reason for this is that up till now many European companies had NOP certification in addition to their EU certification. Now that they do not need it for their exports to the USA they will save on their expenses by not renewing the NOP certification.

“Producers in third countries who must use only NOP certified ingredients for their products to be exported to the USA are finding that their suppliers will no longer be able to supply them with the NOP ingredients they need, unless they can persuade them to keep their NOP certification.”

R.B. Capricorn International has come across this with producers in Italy and suspects that similar problems will arise with other EU countries. Mr Bar-Chen is not aware if there is any intention in the EU-USA Organic Equivalency Agreement of including third country manufacturers in the equivalency agreement in the future, but sees this as inevitable in the long run, and the sooner the better.

“We have had some difficulties procuring NOP cannellini beans and tomato products with NOP certification in Italy, two very popular ingredients that are widely exported from Italy. We have persuaded at least one company to oblige us by certifying their products NOP, but can see future difficulties,” he said. “Many producers in Europe that we spoke to were not aware that their EU certified products cannot be used outside the EU for manufacturing items intended for the USA.”