US beef exports to EU countries are booming now that they can enter tariff-free, but demand for beef from cattle that haven't been treated with hormones - the only kind allowed in the EU – is stronger than the US supply.

 

US beef sales this year to the EU are already up 60% with exports projected to reach 10,500 tonnes, according to John Brook, who represents the US Meat Export Federation in the EU. Exports of US beef last year - the EU measures the beef marketing year from July through June - were about 6,300 tonnes, but those were subject to 20% tariffs.

 

"There is no question today that the limitation is the supply of non-hormone-treated cattle in the US," Brook said. There is plenty of room for more US beef exports to the EU, Brook said.

 

The EU's zero-tariff quota applies to 20,000 tonnes of US beef per year for three years, according to an agreement signed between the EU Commission and the US government in May last year. After the initial three years, the EU and US negotiators left open the option to expand the quota to 45,000 tonnes per year indefinitely.

 

The main problem now, Brook said, is convincing US ranchers there will be a steady demand from the EU to justify raising cattle specifically for that market without the use of growth-promoting hormones. Ranchers in the US treat cattle with hormones to promote more efficient use of the feed that the animals digest, putting more meat on them.

 

Brook said that the US Meat Export Federation hopes the initial success of raising exports this year will help convince US ranchers it is worthwhile to go to the added trouble of conforming to EU rules to ship to the region.

 

"We hope that the signal is being sent back to the (US) farmers today of the premium they can get with (non-hormone-treated cattle) are such that they will be encouraged to produce more of it next year," he said.

 

There has been a lot of bad blood between the EU and the US over beef trade. The EU first banned US beef in 1988 and the US sued the EU through the World Trade Organization in 1996 to lift that ban. The US won that case in 1998. It then implemented WTO-sanctioned retaliatory tariffs on US$117 million worth of EU imports when the EU refused to comply and allow in US beef from hormone-treated cattle.

 

The May quota agreement last year was enough to convince the US government, which still backs the safety of beef from hormone-treated cattle, to drop its retaliatory tariffs by more than half.

 

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