An agreement in which the European Union would allow more American beef into its markets is being celebrated by the U.S. beef industry.
The agreement gives U.S. producers sole access to the EU market for 35,000 metric tons of duty-free beef from non-hormone-treated cattle by the seventh year of the agreement.
That will be in addition to the 11,500 metric tons of non-hormone-treated beef the U.S. is allowed to export annually to the EU with a 20% tariff before being subject to higher duties.
“We consider this a great step forward in our market access discussion with the Europeans,” Kent Bacus, National Cattlemen’s Beef Association senior director of international trade and market access, said.
But it’s only a start in knocking down unjustified trade barriers the EU has constructed to keep U.S. beef out, he said.
“We still want to have further conversations with the European about expanding our access,” he said.
But that’s going to be a difficult conversation, he said.
“They don’t want to have this conversation at all. They want to exclude agriculture from trade talks with the U.S.,” he said.
There is strong demand in the EU for U.S. beef, but the EU uses protectionist measures to keep U.S. competition out of its markets, he said.
The issue goes back to the EU’s ban on beef from cattle treated with hormones. The EU banned the use of synthetic hormones in its cattle production in 1981 and banned the importation of beef from cattle treated with hormones in 1989.
Because that violated the World Trade Organization’s Sanitary and Phytosanitary Agreement, the U.S. took the issue to the WTO and won the case in 1999, he said.
The U.S. had imposed retaliatory tariffs on imports from the EU in 1989 and expanded those tariffs in 1999. With the threat of additional U.S. tariffs, the two countries signed a Memorandum of Understanding in 2009.
That created a 45,000 metric ton duty-free quota for the U.S. to export beef from non-hormone treated beef into the EU. In exchange, the U.S. temporarily suspended the retaliatory tariffs.
Some U.S. producers started switching from conventional production, enrolling in USDA’s non-hormone program, he said.
“They did that as an investment in the future,” he said.
It was a very big investment, but Europe is a high-end market, he said.
The problem is the EU started approving other countries that weren’t part of the MOU, and they started sending product under the quota established for the U.S., he said.
“It squeezed U.S. producers out of a promising market. It was supposed to be a good faith agreement and the Europeans didn’t act in good faith and abide by the terms,” he said.
In 2016, NCBA asked the U.S. Trade Representative’s office to investigate the issue under customs enforcement.
“The U.S. had the right to walk away from the 2009 agreement and re-establish retaliatory tariffs,” he said.
The result is the new agreement signed Aug. 2.
“The only catch with this is the European Parliament still has to approve it,” he said.
Hopefully, that will happen this fall, he said.