The USA and the EU have signed a “memorandum of understanding” that effectively brings to an end the long running dispute over the EU ban on imports of hormone-treated beef.
The battle has raged for over 20 years in the World Trade Organisation (and its predecessor the GATT), with the USA challenging the legality of a ban they did not believe was scientifically justified, and then imposing tariffs on EU exports.
The USA had recently threatened to apply so-called “Carousel” arrangements, which would involve rotating these tariffs around a range of different EU food products to a maximum value of $117m.
But this has been dropped, as the two sides have now reached a deal that will see the EU increase the volume of hormone-free beef it imports from the USA in return for a phasing out of import tariffs.
Specifically, the EU will accept 20,000t of hormone-free beef, duty-free, for each of the next three years, rising to 45,000t in year four. This replaces the existing 11,500t quota which is allowed at a reduced tariff rate of 20%.
In return, the USA will limit its tariffs to $38m on a non-rotating basis. These tariffs will be eliminated altogether by year four, so helping to make EU food products more competitive in US markets.
Announcing the deal with Brussels, US trade representative Ron Kirk described it as “a pragmatic way forward” even though he insisted hormone-reared beef was perfectly safe to eat. “I am very pleased that we’ve found a way to get substantial quantities of high-quality US beef back into an important market.”
But the move has angered EU farmer representatives, who see it as “unbalanced”. “The agreement means that the EU is offering upwards of €400m worth of market access over four years, but still has to pay an additional €110m in sanctions,” said COPA secretary general Pekka Pesonen.