European Union trading agreements have not expanded trade in fruit and vegetables, according to a report from the US Economic Research Service.

The report found that the EU participates in regional and preferential trading arrangements more than any other country or region. Over 70 per cent of EU fruit and vegetable imports are from countries benefiting from preferential treatment for some portion of the trade. "The most valuable preferences are accorded the 42 least developed countries, while 77 former colonies of EU countries also receive important preferences," found the report.

These agreements are an integral part of the management of EU imports by the common agricultural policy. Exports from countries without preferences, including the US, are at a disadvantage in EU markets, the report noted.

"EU domestic price targets for fruits and vegetables have been largely unaffected by design through EU preferential agreements. Preferential agreements are extensions of the CAP, allowing the EU to manage the sources of imports and adjust import levels, depending on market needs and policy objectives," the report maintains.

The EU is the world's largest importer of fresh produce due to "high incomes, an ageing population that prefers a healthy diet, and a historical preference for high quality fruits and vegetables," the report states. "The EU has been a principal participant in global multilateral trade negotiations, but it has also participated in regional trade agreements and other non-global preferential trading agreements more than any other countries."

Only the US, China, Taiwan, Japan, South Korea, Singapore, Hong Kong, Australia, New Zealand, and Canada face exclusively most-favoured-nation (MFN) treatment for access to EU markets, which puts them at a disadvantage to the EU's trading partners with preferred agreements, the report found.

The EU's preferential agreements may not generate trade, but they do divert trade, and the preferred partners are the beneficiaries. Other trading partners, including the US find their fruit and vegetable exports disadvantaged in EU markets "because they face higher tariffs than countries with preferential trading agreements with the EU."

Preferential agreements provide the EU with expanded control over the sources of its imports and they also achieve some limited preferences for EU fresh produce exports to countries with which it has free-trade agreements," the report concluded.

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