US, EU sign deal ending beef dispute

14th May 2009, Comments 0 comments

A new agreement will see EU provide access at zero duty of up to 45,000 tons of US beef and Washington shelve plans to slap new import duties on EU products.

Washington – The United States and Europe have inked a provisional deal to end a longstanding dispute over the EU's ban on American hormone-treated beef, officials said Wednesday.

Under the memorandum of understanding, the EU will provide access at zero duty of up to 45,000 tons of US beef produced from cattle not treated with growth-promoting hormones, they said.

Washington, on its part, will shelve plans to slap new import duties on EU products ranging from Roquefort French cheese to Italian mineral water under the agreement signed in Geneva.

Some 11,500 tons of US beef are allowed into the EU at present and they are subject to a 20 percent duty.

The agreement still does not end the primary dispute over hormone beef.

"The EU remains one of the few markets to ban beef from cattle given growth-promoting hormones – beef that is perfectly safe to eat – but we see this agreement as a pragmatic way forward," US Trade Representative Ron Kirk said.

"This agreement also shows what we can accomplish when we adopt a practical, problem-solving approach to trade barriers," he said in a statement providing details of a three-phase plan for the parties to bury the hatchet.

The EU import quota would be set at 20,000 tons in each of the first three years under the first phase implementation of the agreement, in which the United States may maintain import duties currently applied to certain EU products but will not impose new duties announced in January.

The new duties on French Roquefort cheese were due to have been tripled, which has grated on nerves in France.

Under a second phase plan lasting one year, the EU would further expand the quota to 45,000 tons.

"During this phase, the United States would suspend the application of all additional import duties imposed on EU products," the statement said.

"For the United States, a decision on whether to move to phase 2 would depend on the existence of conditions at the end of phase 1 that would allow the US beef industry to make full use of the additional quota," it said.

Talks will be held on various issues before the third phase at the end of the fourth year, in which the EU would maintain the 45,000 ton quota and the United States would continue not to apply any increased import duties.

"A decision on whether to move to phase 3 would be made following negotiations on several issues, including duration, withdrawal, and the status of WTO litigation on the EU's compliance with the WTO ruling in the beef hormones dispute," the statement said.

The dispute has been festering since 1988 when the EU banned US beef on the grounds that American beef producers made use of certain growth-promoting hormones that were not authorised in the European bloc.

The World Trade Organisation, the global trade watchdog, ruled 11 years ago that the ban was inconsistent with WTO rules, allowing the United States to slap retaliatory duties on European products.

For at least the first 18 months of the agreement, neither party will move forward with WTO litigation on the EU’s compliance with the WTO’s ruling in the beef hormones dispute," the statement said.

"After 20 years of disputes over this issue, it appears we have found a way forward that creates economic opportunity here at home and benefits consumers in Europe," said US Agriculture Secretary Tom Vilsack.

The row had taken a turn for the worse in the final days of George W. Bush's presidency, when Washington announced moves to impose the new tariffs on such products as the French Roquefort, considered a national icon.

AFP / Expatica

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