Agvocating Insights

Agroindustrial Sector Trade Balance Between US and EU

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For many years, there has been a mutual relationship of goods exchanges between the U.S. and Italy. Many factors, such as the high presence of Italian people in America, has allowed the Italian food culture to become famous in the United States.

In 2013, U.S. agricultural, fish and forestry exports to Italy were almost $1.2 billion. On the other hand, import of U.S. from Italy represents $3.7 billion. The most important exported products from U.S. to Italy are, most of all, wheat ($186 million) and soybeans ($91 million).

The other part of exported products, which represent a lower market share, are hides and skin, hardwood lumber and planting seeds. On the contrary, Italy exports wine ($1.6 billion), olive oil ($575 million) and cheese ($297 million) to the U.S. In fact, the agricultural balance of trade is nearly 4:1 in Italy’s favor, according to export.gov.

The bureaucracy, imposed by European Union laws, is structured and complex. It is so restricted that there is no convenience in importing genetically modified products from the States.

Some treaties, such as the TTP, which the U.S. pulled out of early this year, tried to change the bureaucratic barriers. The aim was to create a free trade area between United States and European Union.

There is another trade barrier in Europe and in Italy. In fact, the cultural debate about genetically modified organisms (GMOs) started to emerge only a few years ago. Public opinion  and distrust regarding genetically modified products and their derivatives have helped create this barrier.

In particular, both Italy and Nebraska depend on agricultural production. Today, the way to manage this sector has completely changed. Ag business in Nebraska is technological because it optimizes the agricultural production through the use of genetically modified seeds.

In fact, they maximize the productive efficiency reducing the need of water and sun, guaranteeing resistance to imbalanced environmental climate changes. This has caused an increase of the production and has brought lower prices. The advantage of GMOs is an economic factor.

Thus, we can affirm that the imbalance in the commercial trade between U.S. and EU (and Italy in particular) is due to two big factors: the legislative situation of EU and cultural factors.

If the EU wants to make its own agroindustrial sector competitive, it will have to allow the use of GMOs. Moreover, GMOs don’t involve any proven risk for health and are actually doomed to be a necessity in a short time. If communicative action is taken to make people understand this, the introduction of GMOs in the European market is easily predictable.

Thus, a more balanced ratio between imports and exports between the United States and Italy will surely follow. The unpredictability and variety of the external atmospheric factors could influence Italy and the other European countries to adopt GMOs and the latest biotechnologies.

These factors represent a condition of uncertainty for those who want to invest in the agribusiness sector due to the high economic risks related to this type of business. The survival of the companies is linked to the continuity of the investments and production in terms of volumes and quality of the product.

It could be a fundamental factor toward the use of the GMOs and the new biotechnologies. Competition represents a crucial issue because the market prices of agribusiness in a specific historical period and sector can bring a company to succeed or lead to bankruptcy.

If GMOs were legalized, it would be necessary to adopt these technologies in order to maintain the market shares and still be competitive. Lastly, the increasing resistance of bacteria and insects to herbicides could represent another threat that can influence the decision towards adopting this kind of technique.

In an increasingly competitive sector like agribusiness, where the profit margins are getting thinner year by year, the minimization of the risks and the maximization of the productivity is fundamental for survival on the market.

The new challenges in an ever more competitive and complex sector could lead, in a short time, to an opening to this new kind of production also in Italy and EU. According to GMO expert, chair and professor of the department of Economics of the university of Nebraska in Kearney, Frank A. Tenkorang, new cultural barrier could be modified by an information process to influence the citizens and provide correct information regarding the risks and benefits towards the use of genetically modified seeds.

THIS STORY WAS COMPILED BY STUDENTS FROM THE INTERNATIONAL UNIVERSITY OF LANGUAGES AND MEDIA FROM MILAN, ITALY.


Jader  Manno Jader graduated in Law. He aims to work in  communication and public affairs. He is going to have a profession in public affairs in Brussels; then, he  hopes to move to New Zealand. Jader Manno
Jader graduated in Law. He aims to work in communication and public affairs. He is going to have a profession in public affairs in Brussels; then, he hopes to move to New Zealand.


Tommaso Marai Tommaso graduated in Public Relations and Business Communication. He would like to work in communication and marketing field. Tommaso Marai
Tommaso graduated in Public Relations and Business Communication. He would like to work in communication and marketing field.


Edoardo Carra Edoardo graduated in Languages and Cultures for Tourism and has Master's Degree in Foreign Languages for International Communication. He chose MICRI because he is interested in cultures and international relations. He wants to work in public affairs.Edoardo Carra
Edoardo graduated in Languages and Cultures for Tourism and has Master’s Degree in Foreign Languages for International Communication. He chose MICRI because he is interested in cultures and international relations. He wants to work in public affairs.

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