U.S. and Europe detail plan to end beef dispute

Oct 9, 2009
by DTN
U.S. and Europe detail plan to end beef dispute

The European Union (EU) and U.S. circulated details last Wednesday of their ground-breaking deal solving their longrunning dispute over beef.

But other exporters remain concerned that they would not benefit from the EU’s plans to import additional amounts of high-quality beef.

The U.S. and EU agreed in May to end their two-decades-long row over an EU ban on hormone-treated beef by increasing the European quota for other beef.

In return, the U.S. agreed to reduce and eventually drop duties it was authorized by the World Trade Organization (WTO) to impose on EU produce in retaliation for the ban.

Under WTO rules, access to the extra import quota must be open to all countries under “most favored nation” (MFN) terms.

But beef producers from Latin America and other countries fear the deal has been structured to favor U.S. beef.

“Discrimination can come not only in the definition but also in the implementation,” Uruguay’s WTO ambassador, Guillermo Valles Galmes, told Reuters.

“Therefore, we would like to see not only the definition but the implementation of the agreement to check if it’s done on an MFN basis.”

Beef accounts for 25 percent of Uruguay’s exports and the EU is its biggest market.

Beef exporters have been keenly awaiting the details of the agreement, which had been promised for early August.

A document circulated to WTO members by the EU and U.S. missions at the WTO, a copy of which was obtained by Reuters, confirmed that the EU would admit an extra annual duty-free quota of 20,000 metric tons from August this year.

If the two parties agree to move to a second phase, the additional quota will rise to 45,000 metric tons in the fourth year.

The EU already admits a quota of 60,000 metric tons of beef, of which the U.S. has a share of 11,500 metric tons, charging a tariff of 20 percent. Imports outside that quota pay 100 percent.

Under the agreement, the definition of high-quality beef says it must derive from heifers and steers less than 30 months of age which have been fed for at least 100 days before slaughter on a diet containing no less than 62 percent of concentrates and/ or feed grain products.

The beef can be labeled “high-quality beef” in accordance with existing EU food labeling regulations.

The quality definition falls short of the grass-fed beef exported by Latin American breeders.

Besides Uruguay, Argentina, Brazil, India, New Zealand, Nicaragua and Paraguay expressed concern at the deal at a meeting of the WTO’s dispute settlement body in June.

But Brussels and Washington have hailed the agreement as a pragmatic way of resolving trade problems. — DTN