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Iowa European Office News Update

July 17, 2023

U.S.-EU transatlantic cooperation
At the fourth ministerial meeting of the Trade and Technology Council (TTC) in Lulea, Sweden, on May 30 and 31, 2023, leaders from the U.S. and the EU discussed a variety of issues that play a major role in the transatlantic partnership. Topics included artificial intelligence, semiconductors, quantum technologies, sustainable trade, clean energy incentives, critical minerals, investment screening, 5G and 6G, and standardization for the charging of heavy-duty vehicles.

The creation of the TTC was announced in June 2021 at the U.S.-EU summit in Brussels, Belgium, and has resulted in the formation of working groups that focus on technology standards, climate and clean tech, secure supply chains, ICTS security, global trade challenges and other topics. The objective of these continued discussions is to reach agreements on standards and regulations, to reduce trade barriers, support emerging technologies and to strengthen the position of both economies as technological and industrial leaders.

In March 2023, The American Chamber of Commerce to the European Union released the Transatlantic Report 2023 reaffirming that the United States and Europe remain their most important trading partners with a trading volume of goods of $1.2 trillion in 2022 – the highest value ever.

UK agriculture policy
With Brexit, farming policy has become a devolved responsibility in the UK. The governments of England, Wales, Scotland and Northern Ireland thus each develop their own post-Brexit agricultural reforms, which are in their developing and/or pilot phase. The agriculture (Wales) bill presents the first-ever “Made in Wales” agricultural policy. All UK countries’ policies focus on sustainability.

European pet care market
Pet care demonstrated to be a recession-resilient industry throughout the pandemic and in post-pandemic Europe. New pet acquisitions increased as home office options offer more flexible working hours and time to take care of a pet. In 2020, pet care sales in Europe soared by 8.7% with pet food, accessories, and beauty and grooming categories benefiting the most from the pandemic with growth of 8.1%, 10.3%, and 11.3%, respectively. With high inflation rates in 2022 and 2023, however, particularly lower income households have adjusted their purchase habits, downtrading to private labels and cutting non-essential purchases, such as treats. The continued humanization of pets has nevertheless boosted the sales of premium products, outgrowing mid-priced alternatives.

Throughout 2023, pet care sales in Europe increased by 1.3% in volume and 8.3% in value. The number of pets in Europe is expected to continue rising. Primarily smaller dog breeds and cats are becoming more popular due to the urbanization of cities and convenience.

With the growing number of young pet owners, e-commerce platforms are trending, particularly platforms offering a chat function to seek advice from industry experts. E-commerce sales of pet products increased by 81% between 2015 and 2022 and are expected to record another 7% growth by 2026. However, in-store retailers remain the most popular sales channel for pet care products, given the advantage of personalized consultation. Current trends in the European pet care industry are centered around sustainability, including for instance issues like sustainable sourcing, packaging, and ingredients composition. Among the fastest growing niches in the market are insect-based proteins and plant-based treats. The most developed market in sustainable pet care is the German market; the least developed European market in the industry is France.

The U.S. Commercial Service mentioned multiple sector opportunities for U.S. exports to Poland, with bilateral trade topping $14.9 billion. Sectors include safety and security, as Poland represents a critical piece of NATO’s collective security and is projected to increase defense spending to 3% of GDP in 2023. Growth is also forecasted in IT/cybersecurity as well as infrastructure. The country continues to show commitment to improving its transportation infrastructure, focusing on roads, railways and waterways which could benefit from EU funds.