Dive Brief:
- The U.S. and Switzerland have signed a new organic equivalency arrangement to open up the European market to the U.S. organic food industry and to facilitate trans-Atlantic organic trade. The U.S. already had an organic equivalency pact with the European Union, signed in 2012, but Switzerland is not part of the EU, so the lack of an agreement had bottlenecked trade with the country.
- "The new pact allows organic products certified in the U.S. or Switzerland to be sold as organic in either country, beginning July 10, and eliminates the need for two sets of fees, inspections and paperwork while still upholding high organic oversight standards," according to the Organic Trade Association.
- The organic market in Switzerland, whose residents are the global leaders in consuming organic foods per person, is steadily growing, including a 12% jump in consumption in 2013 from the prior year — making it about $2 billion market.
Dive Insight:
U.S. organic food producers now have one of the most valuable markets for organic food consumption at their disposal. The arrangement could mean not only more sales but also easier trade between the U.S. and Switzerland and the EU as a whole. According to the OTA, "Swiss organic food makers often source organic ingredients from the EU, which are then processed and sent to the United States, and food processors in the EU and the U.S. frequently use Swiss organic ingredients, such as organic chocolate, organic milk powder, or organic dried mustard." Thus, the pact means these transactions will be better facilitated and all countries involved will see new opportunities for trade.
The U.S. has been signing pact after pact with countries around the world to encourage imports of U.S. organic foods, including Canada (2009), EU (2012), Japan (2013), and Korea (2014). Canada and EU are the U.S.'s two most valuable organic trading partners, but opening up the Asian market to U.S. organic food producers over the past few years has been essential. With all of these pacts and other trade deals around the world, in 2014, the U.S. exported about $3.2 billion worth of American organic products.
In the U.S., organic food sales are skyrocketing. Sales last year came to a record high of $35.9 billion, an 11% increase from 2013.