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16 October 2020

 

Towards a negotiated solution in the EU-US Airbus–Boeing saga? The WTO authorises the EU to take countermeasures at a value of nearly USD 4 billion per year

On 13 October 2020, the World Trade Organization (hereinafter, WTO) published the decision of the Arbitrator in the case United States — Measures Affecting Trade in Large Civil Aircraft — Second Complaint (DS353), the so-called Boeing dispute, which had been launched by the EU against the US. The decision allows the EU to take ‘retaliatory measures’ in the amount of nearly USD 4 billion per annum vis-à-vis the US. In October 2019, a similar decision was issued by the WTO Arbitrator in the parallel case European Communities and Certain member States – Measures Affecting Trade in Large Civil Aircraft (DS316) (hereinafter, Airbus dispute), which has allowed the US, already for almost one year, to suspend certain tariff concessions vis-à-vis the EU in the amount of USD 7,496.623 million per annum. The long-awaited decision could provide the necessary incentive for the EU and the US to pursue a negotiated solution and de-escalate current tensions between both sides.

On 27 June 2005, the EU (the European Communities at that time), requested WTO dispute settlement consultations with the US concerning alleged prohibited and actionable subsidies granted by the US Federal Government and State Governments and referred to “specified state and local subsidies for the production of the Boeing 7E7; specified NASA research and development subsidies; specified Department of Defense research and development subsidies; specified National Institute of Standards and Technology subsidies; FSC/ETI subsidies; research and experimentation tax credits; NASA procurement contracts, and other subsidies”. One of the State subsidies referred to by the EU was a tax benefit provided by the US State of Washington under the Washington State House Bill No. 2294 (2003), namely the US State of Washington’s Business and Occupation (B&O) tax rate reduction. The EU noted that such subsidies paid to US-based aircraft manufacturer Boeing were inconsistent with the WTO Agreement on Subsidies and Countervailing Measures (hereinafter, SCM Agreement) and the General Agreement on Tariffs and Trade (hereinafter, GATT) 1994. The request was made after the US had requested consultations in a similar context in 2004, alleging that certain subsidies paid to EU-based aircraft manufacturer Airbus for the production of the Airbus A350 and A380 passenger aircrafts violated WTO rules (see Trade Perspectives, No. 19 of 18 October 2019).

On 20 January 2006, the EU requested the establishment of a WTO dispute settlement panel, which was established on 17 February 2006. The Panel found that the Washington State taxation measures enacted under Washington State House Bill No. 2294 did not constitute prohibited export subsidies. The EU appealed and, on 12 March 2012, the Appellate Body found that the WTO panel had erred in denying various requests made by the EU and reverted some of the findings by the WTO Panel. In particular, the Appellate Body held that the US State of Washington’s B&O tax rate reduction was a subsidy within the meaning of the WTO SCM Agreement.

In October 2012, the EU requested the establishment of a compliance panel on the basis of Article 21.5 of the WTO Dispute Settlement Understanding (DSU). On 9 June 2017, the compliance panel found that the US had “failed to fully implement the recommendations and rulings of the DSB to bring their measures into conformity with their obligations under the SCM Agreement” and, in April 2019, the Compliance Appellate Body report was adopted, which generally upheld the panel’s findings. In May 2020, the US informed the Dispute Settlement Body (DSB) of its compliance with the recommendations, arguing that “the State of Washington had enacted legislation removing the preferential B&O tax rate”.

In parallel to the compliance proceedings, the EU requested, in September 2012, the authorisation by the DSB to take countermeasures alleging that the US had failed to comply with the DSB’s recommendations. The US objected to the level of suspension of concessions or other obligations contained in the EU’s request. In November 2012, in view of the compliance proceedings, the US and the EU requested the Arbitrator to suspend its work. Shortly after the decision on compliance by the Appellate Body, on 5 June 2019, the EU requested the resumption of the work by the Arbitrator, who has now issued its decision.

The long-awaited arbitral decision

On 13 October 2020, the WTO published the decision by the Arbitrator regarding the amount of countermeasures to which the EU would be entitled in the context of the Boeing dispute. The WTO Arbitrator concluded that “with reference to Articles 7.10 of the SCM Agreement and 22.6 of the DSU, the level of countermeasures “commensurate with the degree and nature of the adverse effects determined to exist” amounts to USD 3,993,212,564 per annum”. Additionally, the WTO Arbitrator stated that, “with reference to Article 22.3 of the DSU, the United States has not demonstrated that the European Union failed to follow the principles and procedures set forth in Article 22.3 of the DSU in determining that it is not practicable or effective to suspend concessions or other obligations in trade in goods and that the circumstances are serious enough”. Thereby, the EU is entitled to impose additional duties in the amount of nearly USD 4 billion.

The monetary amount of the countermeasures that the EU is entitled to adopt, on the basis of the decision of the Arbitrator, is lower than the USD 7.5 billion granted to the US in the parallel Airbus dispute. However, reportedly, the EU considers that it can still impose roughly another USD 4 billion per year of countermeasures on the basis of a 2002 Arbitrator decision in the context of the US – Tax Treatment for Foreign Sales Corporations dispute (DS108). However, the EU never implemented any additional tariff within that dispute. The US claims that such countermeasures are no longer appropriate, as the law that was subject of the dispute was repealed in 2006. According to Article 22(8) of the DSU, “the suspension of concessions or other obligations shall be temporary and shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed…”.

Initial reactions from both sides of the Atlantic

Shortly after the publication of the WTO Arbitrator’s decision, the European Commission (hereinafter, Commission) stated that there would be no additional duties for the time being, but that the Commission would take steps to prepare for such action. The Commission’s Executive Vice-President and European Commissioner for Trade Valdis Dombrovskis stated that the WTO arbitral decision allows the EU to impose tariffs on US products. However, Commissioner Dombrovskis pointed out that he would prefer “not to do so”, as additional duties were “not in the economic interest of either side, particularly as we strive to recover from the Covid-19 recession”. Commissioner Dombrovskis stated that he had been in contact with the US Trade Representative (hereinafter, USTR) Robert Lighthizer and that he was hoping that the US would “now drop the tariffs imposed on EU exports”. Commissioner Dombrovskis underlined that the EU would continue to pursue negotiations with the US, but, if a negotiated outcome were not possible, the EU would be forced to exercise its rights and “impose similar tariffs”. The Commission’s approach is supported by the European Parliament and Member of the European Parliament Bernd Lange, from the Progressive Alliance of Socialists and Democrats group and Chairman of the European Parliament’s Committee on International Trade (INTA), who stated that this decision should be seen as an opportunity to finally end tariffs and pursue a negotiated settlement. However, if there were no constructive engagement from the US, the EU should “enforce its rights by putting in place the tariffs the WTO rules now allow the EU to impose”.

The USTR Lighthizer noted that the Arbitrator’s decision only concerned the State of Washington’s B&O tax rate reduction and that, since Washington State had already repealed the tax break earlier this year, the EU had “no valid basis to retaliate against any US products”. Therefore, according to USTR Lighthizer “any imposition of tariffs based on a measure that has been eliminated is plainly contrary to WTO principles and will force a US response”.

Officials from Airbus and Boeing stated that this dispute had already caused them many costs and that a settlement was necessary. Boeing stated that “Airbus and the EU should be focusing their energies on good-faith efforts to resolve this long-running dispute”, while Airbus stated that it was “prepared and ready to support a negotiation process that leads to a fair settlement”.

The end of a long-standing dispute or the beginning of new tariffs?

The Arbitrator’s decision might deliver a new incentive, economically and politically, for the EU-US to engage in negotiations and pursue a negotiated solution. However, it remains to be seen if the necessary willingness of both sides will allow such outcome. The EU stated that it had already made specific proposals to reach a “negotiated outcome” and that it remained committed to work with the US to agree on a “fair and balanced” settlement. However, USTR Lighthizer stated that the US was determined to find a resolution to this long-lasting dispute, but that the US was waiting for a response from the EU on a recent US proposal. The US stated that it would intensify negotiations with the EU “to restore fair competition and a level playing field” in the airline industry. While intending to engage in negotiations with the US, the EU is also renewing preparations for the imposition of countermeasures. Already in April 2019, the EU had published a preliminary list of products that might be subject to additional tariffs. The list includes, inter alia, agricultural products, such as potatoes, nuts, dried fruit, and coffee, as well fish products, chocolates, wines, tobacco, car parts and aircraft. Earlier this week, the Commission announced that it would work with EU Member States to finalise this list. While the final list is not yet available, it can be certain that, as is the case for the additional tariffs imposed by the US in the Airbus dispute, the additional tariffs will affect products and sectors largely unrelated to the dispute and the aircraft industry.

In the Airbus dispute, the US introduced additional tariffs on a range of EU products, amounting to an additional 15% for aircraft and an additional 25% for all other products, such as a large number of agricultural products from all EU Member States (e.g., citrus fruits, yoghurt, butter and butter substitutes, pork ham, and a multitude of cheeses, such as Cheddar, Parmigiano Reggiano, Provolone, etc.), as well as on a number of industrial goods. The US is required by law to periodically review and revise the list of products, applying a so-called ‘carousel retaliation’. The most recent changes were adopted on 12 August 2020 and, in accordance with US law, the next review is to take place 180 days from the day the most recent notice was issued, which means that the next review process should be launched in December 2020 / January 2021 and that a decision must be taken by 9 February 2021.

What’s next?

Despite intending to pursue a negotiated solution, the Commission already appears to be preparing consultations with EU Member States to finalise the list of products that are to be subject to additional tariffs. Before imposing such additional tariffs on US products, the EU must request an authorisation from the WTO Dispute Settlement Body. This is mainly a formality, but it can only be requested at a meeting of the DSB. The next meeting is scheduled to take place on 26 October 2020. As the US is holding presidential and congressional elections on 3 November 2020, it appears unlikely that negotiations would begin in earnest before that date. All legal avenues have been exhausted and it now depends on the political will of both parties to finally settle this longstanding dispute. Businesses in the US and in the EU should diligently assess the list of products considered for additional duties, the possible impact of EU countermeasures, and put in place the necessary measures and advocacy initiatives to avoid or mitigate any negative implications.

 

Pursuing a more sustainable future or setting up trade barriers? The EU intends to make certain products sustainable

On 14 September 2020, the European Commission (hereinafter, Commission) published its legislative Roadmap (or Inception Impact Assessment) for the Sustainable Products Initiative, which will be open for a public consultation until 2 November 2020. The Sustainable Products Initiative aims at enhancing the sustainability of certain products placed on the EU market and would amend Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products (hereinafter, Ecodesign Directive) and, where necessary, make complementary legislative proposals. Revised sustainability requirements for certain products to be placed on the EU market could have significant implications for businesses around the world.

Striving for more sustainable products on the market

The Ecodesign Directive can be considered as an important step in the direction of more sustainable production and products, as it establishes rules aimed at improving the performance of certain products, such as household appliances. Generally, it sets out mandatory energy efficiency requirements. Other than the obvious environmental benefits that are being pursued, the Ecodesign Directive also intends to harmonise rules across EU Member States. The Ecodesign Directive was complemented by Regulation (EU) 2017/1369 of the European Parliament and of the Council of 4 July 2017 setting a framework for energy labelling and repealing Directive 2010/30/EU through the establishment of mandatory labelling requirements for “energy-related products”, referring to goods or systems that have an impact on energy consumption.

The Sustainable Products Initiative must be seen in the context of the EU’s European Green Deal and the EU’s efforts towards a more circular economy. The European Green Deal is a “growth strategy to transform the EU into a fairer and more prosperous society, with a modern, competitive, climate neutral and circular economy”. In March 2020, the Commission published A new Circular Economy Action Plan – For a cleaner and more competitive Europe, which, according to the Roadmap, calls for “a sustainable product policy legislative initiative to make products fit for a climate neutral, resource efficient and circular economy, reduce waste and ensure that the performance of frontrunners in sustainability progressively becomes the norm”. This would be pursued by the Sustainable Products Initiative.

Notably, the Commission underlines that the Sustainable Products Initiative would be developed in close coordination with other initiatives contained in the Circular Economy Action Plan, such as the initiative on empowering consumers for the green transition and the initiative on the substantiation of environmental claims using product and organisational environmental footprint methods.

The envisaged changes

As part of the Sustainable Products Initiative, the Commission intends to extend the scope of the Ecodesign Directive beyond energy related products and to make it applicable to the broadest possible range of products. Furthermore, the Commission intends to “establish sustainability principles and other mechanisms to regulate sustainability-related aspects in a wide range of product related instruments”.

The Roadmap notes that the initiative would aim at providing “the basis for ensuring high environmental performance of all products and, to the extent possible and relevant, services on the EU market, by setting out sustainability principles and specific requirements linked to environmental and, where appropriate, social aspects”.

An impact assessment is supposed to contribute to establish what elements of the EU’s Ecodesign Directive would need to be revised and what further initiatives would need to be taken on the issue. Importantly, the Roadmap announced that an impact assessment would be undertaken to assess which measures would best achieve the objectives. The Commission notes that any measure would include the widening of the scope of the Ecodesign Directive to cover a wide range of products, beyond energy related products. More specifically, this is supposed to “enable the setting at EU level of appropriate minimum sustainability and/or information requirements for specific groups of products, giving priority to addressing product groups identified in the context of the value chains featuring in the Action Plan, such as electronics, ICT and textiles but also furniture and high impact intermediate products such as steel, cement and chemicals”.

As part of the preparations for the legislative changes, the Commission notes that the following measures would be considered: 1) “Establishing overarching product sustainability principles”; 2) “Establishing EU rules to make producers responsible for providing more circular products and intervening before products can become waste (for example providing products as a service, providing repair service/or ensuring spare parts availability)”; 3) “Establishing EU rules for setting requirements on mandatory sustainability labelling and/or disclosure of information to market actors along value chains in the form of a digital product passport”; 4) “Establishing EU rules for setting mandatory minimum sustainability requirements on public procurement of products”; 5) “Requirements to address social aspects throughout the product lifecycle as part of sustainability principles and requirements, where appropriate and feasible”; 6) “Measures on production processes, for example to facilitate recycled content or remanufacturing and to track the use of hazardous substances in such processes”; and 7) “Measures to ban the destruction of unsold durable goods”.

The Commission considers that EU product-specific rules must constantly improve both climate and environmental impacts connected to resource and energy use. In order to do so, the Commission holds that it is necessary to reduce the environmental and climate footprint of products that are placed in the EU market, which means also extending their lifespan and making them more resilient, while reducing waste.

Unnecessary obstacles to trade?

Under the Sustainable Products Initiative, the Commission intends to revise requirements applying to certain products that are to be placed on the EU market, something that will clearly affect businesses in the EU, but also businesses around the world exporting their products to the EU. While additional harmonised EU rules might reduce EU-internal trade barriers, they could constitute important non-tariff measures for EU trading partners.

In this context, the new EU rules for more sustainable products would have to comply with the EU’s international trade commitments, as they would likely constitute technical regulations subject to the rules laid out in the WTO Agreement on Technical Barriers to Trade (hereinafter, TBT Agreement). Notably, Article 2(2) of the WTO TBT Agreement requires WTO Members “to ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade” and that “technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective”. According to the TBT Agreement, such legitimate objectives are, inter alia: “national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment”.

In the Roadmap, the Commission merely notes that it would take measures “to regulate sustainability-related aspects in a wide range of product related instruments, while continuing to respect the EU’s commitments in international trade agreements, including in the World Trade Organization context”. This is a honourable commitment, which will have to be assessed on the basis of the specific legislative proposals and their potential effects on trade.

The business perspective

Given the envisaged changes to the Ecodesign Directive, as well as the other potential legislative proposals, businesses will very likely need to adjust their products to the future rules. Importantly, the sustainability requirements will not only affect EU-based businesses, but also businesses around the world. The ongoing public consultation on the Roadmap for the Sustainable Products Initiative already provides some indication of concerns by businesses.

The trade association Independent Retail Europe, which represents retail groupings, notes that “manufacturers must remain free to determine the durability of their products and to choose whether or not to communicate on this” and that “retailers can only inform consumers about the relation between quality, durability and price, when manufacturers provide them with this information”. Independent Retail Europe opposes maximum timeframes for repairs and notes that “new requirements for consumer information about sustainability should be based on reliable criteria and should avoid confusion for consumers as well as disproportionate burdens for manufacturers and retailers”. In its comments to the Sustainable Products Initiative, the International Association of Lighting Designers makes a number of specific proposals for the Commission to take into account, such as the establishment of a standard for compatibility of retrofitting lamps, as well as noting that, in order to allow for repairs, the availability of spare parts should become a requirement for lighting, as it is already in place for other electrical products.

Where do we go from here?

According to the Commission’s Roadmap, a public consultation on the legislative initiative “to gather input from citizens and stakeholders” would be launched in the first quarter of 2021 and an impact assessment is also supposed to be undertaken to evaluate the impacts of the various policy options “against a ‘business as usual’ baseline”. On that basis, the Commission then intends to publish its legislative proposals with a view to adopting amendments to the Ecodesign Directive and, possibly, additional legislative proposals during the fourth quarter 2021. With the Sustainable Products Initiative, the Commission intends to take another step towards greater sustainability, but the possible impact on businesses in the EU and around the world will also have to be taken into account. Businesses trading with relevant products should pro-actively follow the discussions and contribute to the ongoing legislative debate.

 

The European Parliament considers the draft Regulation on maximum levels of acrylamide in certain foodstuffs for infants and young children as not sufficiently ambitious

On 8 October 2020, the European Parliament (hereinafter, Parliament) adopted a resolution on the European Commission’s (hereinafter, Commission) Draft Commission Regulation amending Regulation (EC) No 1881/2006 as regards maximum levels of acrylamide in certain foodstuffs for infants and young children (hereinafter, Draft Commission Regulation). The resolution calls on the Commission to withdraw the Draft Commission Regulation and to resubmit a more ambitious proposal establishing lower maximum levels of acrylamide for a series of foodstuffs.

Acrylamide in food

Commission Regulation (EU) 2017/2158 of 20 November 2017 establishing mitigation measures and benchmark levels for the reduction of the presence of acrylamide in food defines acrylamide as “a low molecular weight, highly water soluble, organic compound which forms from the naturally occurring constituents asparagine and sugars in certain foods when prepared at temperatures typically higher than 120°C and low moisture”. According to Recital 3 of Regulation (EU) 2017/2158, acrylamide forms mainly in baked or fried carbohydrate-rich foods where raw materials contain its precursors, such as cereals, potatoes, and coffee beans. In particular, starchy foods such as potato and cereal products, which have been deep-fried, roasted or baked at high temperatures, have been shown to be affected, as well as instant coffee and baby foods.

In 2015, the European Food Safety Authority (hereinafter, EFSA) carried out a comprehensive scientific review and, in its scientific opinion published on 4 June 2015, reconfirmed previous evaluations that acrylamide in food potentially increases the risk of developing cancer for consumers of all age groups. According to the EFSA, since acrylamide is present in a wide range of everyday foods, this concern applies to all consumers, while infants and young children are the most exposed age group based on their lower body weight. Possible harmful effects of acrylamide on the nervous system, pre- and post-natal development, and male reproduction were not considered to be a concern by EFSA, based on current levels of dietary exposure. However, the current levels of dietary exposure to acrylamide across age groups indicate a concern with respect to its carcinogenic effects (see Trade Perspectives, Issue No. 8 of 19 April 2019).

The current EU rules on acrylamide in food

In the EU, Commission Regulation (EU) 2017/2158 establishes mitigation measures and benchmark levels for the reduction of the presence of acrylamide in food. Benchmark levels are defined in Article 3(2) of Commission Regulation (EU) 2017/2158 as “performance indicators used to verify the effectiveness of the mitigation measures and are based on experience and occurrence for broad food categories”. However, Commission Regulation (EU) 2017/2158 does not set maximum permitted levels, as the EU has established for other chemical contaminants in certain foods, such as those set in Commission Regulation (EC) No 1881/2006 of 19 December 2006 setting maximum levels for certain contaminants in foodstuffs for 3-monochloropropane-1,2-diol (3-MCPD), glycidiol and polycyclic aromatic hydrocarbons (PAH).

Article 1 of Commission Regulation (EU) 2017/2158 defines its scope and lists the food products to which it applies: 1) French fries, other cut (deep fried) products and sliced potato crisps from fresh potatoes; 2) Potato crisps, snacks, crackers and other potato products from potato dough; 3) Bread; 4) Breakfast cereals (excluding porridge); 5) Fine bakery wares: cookies, biscuits, rusks, cereal bars, scones, cornets, wafers, crumpets and gingerbread, as well as crackers (i.e., a dry biscuit, a baked product based on cereal flour), crisp breads and bread substitutes; 6) Coffee: roast coffee and instant (soluble) coffee; 7) Coffee substitutes; and 8) Baby food and, processed cereal-based food intended for infants and young children.

Food business operators that produce and place on the market products that fall within these eight groups of foodstuffs are required to apply detailed mitigation measures set out in Annexes I and II to Commission Regulation (EU) 2017/2158. Indeed, it appears that the levels of acrylamide in foodstuffs can be lowered by mitigation measures, such as the implementation of good hygiene practices and the application of procedures based on hazard analysis and critical control point (HACCP) principles.

Annex IV to Commission Regulation (EU) 2017/2158 establishes, inter alia, the following benchmark levels for the presence of acrylamide in foodstuffs: French fries (ready-to-eat) 500 μg/kg; Potato crisps from fresh potatoes and from potato dough, Wheat based bread 50 μg/kg, Biscuits and wafers 350 μg/kg; Roast coffee 400 μg/kg, Instant (soluble) coffee 850 μg/kg; Coffee substitutes exclusively from cereals 500 μg/kg; Coffee substitutes exclusively from chicory 4,000 μg/kg; Baby foods, processed cereal based foods for infants and young children excluding biscuits and rusks 40 μg/kg; and Biscuits and rusks for infants and young children 150 μg/kg. Notably, Commission Regulation (EU) 2017/2158 does not provide for sanctions for those food business operators that breach the benchmarks.

Towards the setting of maximum levels of acrylamide in certain food products

Recital 15 of Regulation (EU) 2017/2158 already indicates that, complementary to the mitigation measures laid out in that Regulation, “the setting of maximum levels for acrylamide in certain foods is also to be considered”. Recital 15 further provides that, “[g]iven the health concern, in particular for infants and young children and since mitigation measures are available to achieve low levels of acrylamide, it is appropriate to establish maximum levels for the foods for infants and young children covered by Regulation (EU) 2017/2158”. Therefore, earlier this year, the Commission published a draft Commission Regulation amending Regulation (EC) No 1881/2006 as regards maximum levels of acrylamide in certain foodstuffs for infants and young children. The draft was adopted by the EU’s Standing Committee on Plants, Animals, Food and Feed – Section: “Novel Food and Toxicological safety of the food chain” (hereinafter, PAFF Committee) on 7 July 2020. The draft measure was adopted in accordance with Council Regulation (EEC) No 315/93 of 8 February 1993 laying down Community procedures for contaminants in food and foresees a maximum level of acrylamide in biscuits and rusks for infants and young children at 150 μg/kg and at 50 μg/kg for baby foods, processed cereal based foods for infants and young children, excluding biscuits and rusks.

The European Parliament’s requests more ambition

The European Parliament objected against the draft Commission Regulation under the regulatory procedure with scrutiny according to Article 5a(3)(b) of Council Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission, which is still provisionally applicable on the basis of Recital 21 of Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers.

In its resolution adopted on 8 October 2020, the European Parliament affirmed that it was “undisputed that the occurrence of acrylamide in food can be minimised by applying appropriate mitigation measures and, across all food categories, it has been proven possible to produce products with a low acrylamide content”.

Article 2(1) of Council Regulation (EEC) 315/93 of 8 February 1993 laying down community procedures for contaminants in food provides that “food containing a contaminant in an amount which is unacceptable from the public health viewpoint and in particular at a toxicological level shall not be placed on the market” and in Article 2(2) that “contaminant levels shall be kept as low as can reasonably be achieved”. The European Parliament considers that the Draft Commission Regulation is not compatible with Council Regulation (EEC) 315/93 noting that “the proposed maximum level for acrylamide in the food category of ‘baby foods, processed cereal based foods for infants and young children excluding biscuits and rusks’ should be set below, and certainly not above, the current benchmark level of 40 µg/kg” and that “the proposed maximum level for acrylamide in the food category of ‘biscuits and rusks for infants and young children’ should be set clearly below the current benchmark level of 150 µg/kg”. Therefore, the European Parliament requested the Commission to lower the proposed maximum level of acrylamide for biscuits and rusks, including those not specifically targeted to infants and young children. Additionally, the European Parliament asked “the Commission to set strict maximum levels not only for the two product categories proposed in the draft Commission regulation, but also for other product categories, and most urgently for biscuits and rusks that do not fall under the specific category of ‘biscuits and rusks for infants and young children’.”

The European Parliament made this request to the Commission based on the consideration that, although not specifically marketed for infants and young children, those products were often given to them, exposing those age categories to enhanced risk due to their limited body weight. This position is supported by research carried out in 2018 by the European Consumer Organisation (BEUC), which, according to the European Parliament’s Resolution, showed that “a range of products which do not fall under the two categories regulated in the draft Commission regulation, such as biscuits and wafers, are often consumed by children below three years of age; and some of these products are marketed to children (i.e. packaging design with cartoon characters that appeal to children), while a similar situation can be supposed for products such as crackers or breakfast cereals. The benchmark level established by Commission Regulation 2017/2158 for ‘biscuits and wafers’ (350 μg/kg) and the benchmark level for ‘biscuits and rusks for infants and young children’ (150 μg/kg) differ significantly, without the parents being made aware of the difference in terms of the sought maximum acrylamide content”.

Binding limits or self-regulatory efforts?

The European Parliament’s position is not shared by the EU’s food industry. The food industry confederation FoodDrinkEurope, which represents the European food and drink industry, underlined that self-regulatory efforts had already contributed to reducing levels of acrylamide in some food products. FoodDrinkEurope disputes the notion that the existing legislation has failed to protect consumers against acrylamide and considers it crucial to “allow food business operators to demonstrate their mitigation efforts before considering maximum limits”. Food business operators are indeed making efforts to reduce the level of acrylamide in foodstuffs and developed a toolbox, as well as a code of practice and guidance for small and medium-sized enterprises (SMEs). FoodDrinkEurope, in close co-operation with EU Member States and the Commission, developed a ‘toolbox’ to highlight ways to lower levels of acrylamide in food.  FoodDrinkEurope notes that the formation of acrylamide is not uniform and that pre-testing tools are not adequate to monitor uniform compliance across a batch and that, for this reason, binding maximum levels were not an adequate solution. The consumer organisation BEUC maintains that binding limits are necessary for effective consumer protection.

Way forward

According to EU law, given the European Parliament’s objection, the Commission is not allowed to move forward with the adoption of the proposed draft regulation. In its resolution, the European Parliament called on the Commission to withdraw the draft regulation and submit a new draft to the PAFF Committee. The Commission can now either withdraw the draft Regulation or present an amended measure for discussion and adoption. Interested food business operators should closely monitor the relevant developments and assess the potential implications for their products and supply chains.

 

Recently Adopted EU Legislation

Food and Agricultural Law

 

Trade Remedies

 

Customs Law

 

Other

 

Ignacio Carreño, Fabrizio De Angelis, Simone Dioguardi, Tobias Dolle, Lourdes Medina Perez and Paolo R. Vergano contributed to this issue.

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