March 19, 2012
EU approves tariff quota increase for US beef imports
An increase in a tariff-rate quota for imports of US beef not raised with artificial growth hormones to 45,000 tonnes has been approved this week by the European Parliament.
Parliament on March 14 approved the increase, which is slated to go into effect on August 1, by an overwhelming margin of 650 votes in favour, 11 against and 11 abstentions.
The TRQ increase still needs to be formally approved by EU member state governments represented in the council of ministers, but they are expected to do so because the Danish council presidency already reached an informal consensus on the increase with the parliament and European Commission on February 1.
The TRQ increase is part of a 2008 bilateral deal that also obligated the US to suspend its retaliatory tariffs on EU exports by August 1, 2012. But the US was forced to eliminate these tariffs in May 2011 after a US court ruled they lacked a proper legal basis after July 2007.
Because EU member state governments have already signed off informally on the TRQ increase, the regulation implementing the increase can be approved in any council meeting without further discussion.
One parliament source noted that the Agriculture and Fisheries Council is slated to meet on March 19-20. However, another source said he expected the council of ministers to approve the increase sometime in April.
The increase more than doubles the TRQ for US exports of hormone-free beef from the current level of 20,000 tonnes as stipulated in the second phase of a 2008 US-EU memorandum of understanding (MOU) on beef. That MOU was intended to resolve a longstanding fight over the EU's ban on beef raised with growth hormones, which had been faulted by the World Trade Organisation as a scientifically unjustified trade barrier.
The US had imposed retaliatory tariffs on EU exports in response to the EU's failure to lift the ban in response to the WTO ruling.
The parliament's approval of the increase came less than a week after the USDA took a step toward opening up the US market to EU beef by unveiling a proposed rule that aligns US beef and cattle import regulations with international risk guidelines on bovine spongiform encephalopathy (BSE) -- also called "mad cow" disease.
Members of European Parliament and some EU member states -- particularly Ireland, the Netherlands and France, which have interest in exporting beef to the US -- had pressed for progress the BSE rule in the context of the debate over increasing the beef TRQ, but had not formally linked the two issues.
A parliament source said USDA's release of the BSE rule last week was "a little" helpful in securing a favourable TRQ vote in parliament, even though there was no formal link.
But this source stressed that the proposed USDA rule will take some time to go into effect, given that the 60-day comment period is likely to be extended. As a result, the source said the ball is now in the US court to show it can deliver in opening its market to EU beef.
In addition to the BSE rule, another outstanding issue in US-EU beef trade is a regulation being considered by EU member states that would allow the sale of beef treated with lactic acid as an anti-microbial wash. The US argues that the approval of this lactic acid regulation is necessary for US producers to be able to fill the expanded TRQ because US processors do not want to follow different rules for exports to the EU than for domestic sales.
US trade officials have pressed for changes in a draft of this EU regulation on lactic acid, which they view as too restrictive. The draft would only allow lactic acid to be used on whole, half and quarter bovine carcasses, but not cuts of beef or beef trimmings.
The parliament made no substantive changes to the TRQ increase regulation that the commission proposed last July to the council and parliament. The regulation also raises the TRQ for non-hormone treated beef from Canada to 21,500 tonnes from its earlier level of 20,000 tonnes in accordance with a separate EU-Canada beef MOU.
