December 22, 2016
The Obama Administration announced Dec. 22 that the Office of the U.S. Trade Representative is taking action against the European Union's unfair trade practices that discriminate against U.S. beef imports.
Acting on the request of the U.S. beef industry, USTR has scheduled a public hearing and is seeking public comments in connection with the EU's ban on most U.S. beef products, which USTR said is not based on sound science and discriminates against American beef farmers, ranchers and producers. If the trade action resumes, the U.S. would reinstate industry-supported tariffs on a list of EU products imported into the U.S. USTR said it is particularly interested in comments addressed to the possible effects of reinstatement on U.S. consumers and small- or medium-sized businesses.
Froman noted that the World Trade Organization determined that the EU's U.S. beef import ban "violates its international trade obligations. The EU has failed to live up to assurances to address this issue, and it's now time to take action. Today's action holds the EU accountable and is an important step in encouraging the commission to come back to the table to ensure that American ranchers have access to Europe's market and that European consumers have better access to high-quality U.S. beef."
In 1998, the EU lost a case at WTO for banning U.S. beef. In 2009, the U.S. negotiated an agreement to allow a modest degree of market access for specially produced beef that meets the EU's standards, but that agreement has not worked as intended. The European Commission had argued that this issue should be resolved through the Transatlantic Trade & Investment Partnership (T-TIP). However, given that European officials decided, after their trade minister's meeting in September, not to complete T-TIP this year, now is the time to take action, USTR said.
The USTR decision allows more than $100 million in tariffs to be imposed on the EU. The action is a direct result of the EU's violation of the duty-free beef quota established to compensate the U.S. for losses arising from the EU's ban on the use of hormones in beef production.
The duty-free beef quota was established in 2009 to replace tariffs instituted by the U.S. after WTO determined that the EU hormone ban was not based on science and, therefore, violated WTO rules. Since that time, the EU has permitted other countries to share in the quota, eroding U.S. access to the EU market. Despite repeated requests from the U.S. government, the European Commission has not complied with the original agreement.
While imports from the U.S. initially accounted for the majority of the business done under the quota, over time, imports from Australia, Uruguay and Argentina have increased rapidly, taking a greater share of the quota. Neither Australia, Uruguay nor Argentina was a party to the hormone dispute or the 2009 memorandum that created the quota intended for the U.S., which now has a minority and declining share of the quota, and imports so far this year point to a continuation of this trend, the National Cattlemen's Beef Assn. said.
“The European Union has left us no choice but to seek compensation for the long-standing mistreatment of U.S. beef exports,” NCBA president Tracy Brunner said. “Our temporary agreement with the EU was meant to be an opportunity to build a bridge of trust between U.S. beef producers and EU consumers and to compensate the United States for the losses we have suffered as a result of the EU's hormone ban. The EU has violated the spirit of that agreement and caused U.S. beef exports to become a minority interest in a quota meant to compensate U.S. beef producers.”
The U.S. beef industry exports an average of $6 billion per year. These exports produce an estimated $7.6 billion in economic activity and support 50,000 jobs nationwide. The American beef industry is essential to the overall strength of the nation's economy and to rural communities seeking ways to access new customers in foreign markets.
"American ranchers raise some of the best beef on the planet, but restrictive European Union policies continue to deny EU consumers access to U.S. beef at affordable prices. For several years, we have been asking the EU to fix an agreement that is clearly broken, despite its original promise to provide a favorable market for U.S. beef,” Agriculture Secretary Tom Vilsack said.
“The duty-free beef quota was established specifically to allow the U.S. to export high-quality beef to the EU, but other countries have been inappropriately allowed market access through the quota, as well,” North American Meat Institute president and chief executive officer Barry Carpenter said. “While retaliation is a last resort, it is the only way to secure fair compensation for the losses the U.S. meat industry has incurred over the years due to the EU's hormone ban.”
Senate Agriculture Committee chairman Pat Roberts (R., Kan.) said he will continue to monitor the situation and work in a bipartisan fashion to make sure ranchers are given a “fair shake.” He added, “The patience of U.S. beef producers has worn thin, as has my own. Our government must take proactive steps to enforce the rules of international trade, as it is critical to the American beef industry.”
An interagency committee of trade experts and economists will participate in the hearing and review public comments on the particular products and EU member states that may be subject to the imposition of additional duties, with the goal of resolving this dispute. Complete information on the submission of comments is set forth in a Federal Register notice that is posted on the USTR website (www.ustr.gov) and will be available on the Federal eRulemaking Portal (www.regulations.gov).
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