EU Beef Ban Challenged

23 Dec 2016

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- The U.S. Trade Representative is planning a public hearing in mid-February to consider possibly reinstating punitive trade measures against the European Union over the EU's ban on beef grown with certain hormone implants.

The hearing starts the process of possibly imposing punitive tariffs on as much as $116.8 million on imports from the EU.

USTR is taking such actions even as the Obama administration is preparing to leave and President-elect Donald Trump has yet to name a U.S. trade ambassador to oversee the agency. Nonetheless, the USTR set a Feb. 15 date for a hearing at the request of the beef industry earlier this month.

The U.S.-EU battle over beef products goes back to the 1990s. A World Trade Organization arbitrator ruled against the EU ban, declaring it unscientific. The WTO set the $116.8 million threshold as the amount the U.S. beef industry was impaired by the EU's ban on the hormone treatments. The U.S. was moving ahead in 2008 to seek additional duties. After the Obama administration came in, the U.S. and EU signed a memorandum of understanding to increase the volume of approved non-hormone beef that could be sent to the EU that is now as high as 45,000 metric tons. While the EU raised the quota, now an increasing volume of that beef is being shipped into the EU from elsewhere. So the EU still has not provided benefits to the U.S. beef industry to compensate for the economic harm of the larger overall ban on most U.S. beef products, the USTR states.

"We fully support USTR's decision to use the means available to it under U.S. law to defend the interests of the U.S. beef industry," said Phil Seng, president and CEO of the U.S. Meat Export Federation. "Over the past seven years, U.S. cattlemen and meat packers have made significant investments to meet the requirements of the EU market, only to see the U.S. share of the market undermined by producers in Australia, Uruguay and Argentina. This situation is unsustainable and demands a firm and decisive response."

The National Cattlemen's Beef Association also applauded the USTR action. "The European Union has left us no choice but to seek compensation for the long-standing mistreatment of U.S. beef exports," said Tracy Brunner, president of NCBA. "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."

Meanwhile, the U.S. Cattlemen's Association on Thursday asked federal officials for an update on the status of beef trade in China, which has blocked imports of U.S. beef since 2003 when the first U.S. case of bovine spongiform encephalopathy was found. In September, Chinese leaders indicated the ban should be lifted, but the cattlemen's group said there haven't been any updates on the status of those negotiations.

Thursday was a busy day for the USTR. Besides preparing the action against the EU on beef, the agency announced the Obama administration had won a separate WTO suit against Indonesia over the country's wide-ranging restrictions and bans against various agricultural products. The U.S. and New Zealand had brought the case against Indonesia together. Indonesia, the fourth-most-populated country in the world, has bans on various U.S. fruits and vegetables, beef and poultry and other products. The WTO ruled with the U.S. and New Zealand on all 18 counts they brought against Indonesia. Now Indonesia must either accept the WTO ruling and agree to follow trade rules or seek an appeal.

"The American Farm Bureau Federation applauds U.S. Trade Representative Michael Froman and the Obama administration on their victory at the World Trade Organization in defending farmers and ranchers from unfair trade restrictions in Indonesia," AFBF stated in a release. "America's farmers and ranchers depend on our nation's leaders to hold our trading partners accountable, and Farm Bureau is grateful for the administration's work to defend U.S. agriculture's interests abroad. Enforcement of trade agreements is crucial to maintaining market access. Thanks to this victory, American farmers and ranchers will have the freedom to reach customers in one of the world's most populous countries."

More details on the EU hearing and the background behind it can be found at the Federal Register posting: https://ustr.gov/…

Chris Clayton can be reached at Chris Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)