November 5, 2007

 

US fails to persuade huge Asian markets for beef

 

 

Persuading Asian trading partners to open their markets to US beef exports despite has made little headway, according to US agriculture officials.

 

Japan, China and Korea so far have resisted US demands that they accept American beef from cattle of all ages despite the safeguard of removing specified risk materials (SRMs), such as the spinal column, said USDA officials. This would be in accordance with the guidelines of the World Animal Health Organization (OIE) for controlled risk countries, of which the US is one.

 

Deputy Undersecretary of Agriculture for Farm and Foreign Agricultural Services Ellen Terpstra on October 29 said that a US delegation visiting Korea earlier this month made it clear that the US Congress "expects to have [beef] trade flowing" under the OIE rules before it will consider a pending bilateral free trade agreement.

 

She said that it is important for Korea to reach a new beef trade protocol with the United States "in the coming weeks," given that both governments will have the opportunity to pass the bilateral US-Korea Free Trade Agreement in the coming months.

 

However, a Korean official said the US delegation did not suggest an exact date to conclude an agreement on the opening of the beef market. The bilateral discussions took place on October 12, and no additional talks have yet been scheduled.

 

The Korean official said it is impossible to welcome all US beef imports as the country still has an incomplete feed ban, lacks compulsory checks on animals that possibly have BSE (bovine spongiform encephalopathy) or mad cow disease, and is unable to determine the precise age of cattle and lacks a mandatory national animal identification system.

 

In addition to Korea, the US delegation visited Japan, China, Hong Kong, Taiwan and Macao to press for the full opening of their beef markets. Terpstra said she expects "further engagement in the coming weeks" with all six countries.

 

Acting USDA Secretary Chuck Conner said last week that he and US Trade Representative (USTR) Susan Schwab would decide on how to proceed after a briefing on the trip mid-week. He also emphasized that the trip demonstrated that US government efforts to open beef markets cover a range of countries.

 

Conner said the US "expect[s] all of Asia and all of our international trading partners" to abide by OIE guidelines for trade in beef. Sources explained that Japan and Korea had pressed the US for assurance that they are not being singled out by US requests for OIE compliance.

 

Terpstra said the current system the US uses with some trading partners of carrying out special export verification programs is "burdensome and not commercially viable." USDA meets separate sets of BSE requirements for beef exports to individual countries that demand that USDA do so. For example, exports to Japan must be proven to be from cattle 20 months of age or younger.

 

Aside from Terpstra, the delegation included Richard Crowder, a former US chief agriculture negotiator who now consults for USTR, as well as a technical expert with USDA.

 

Terpstra said Japanese officials suggested allowing imports of US beef in accordance with OIE guidelines for controlled risk countries if the US attained "negligible risk" status. She characterized this position as "a clear rejection of [Japan's] international obligation, of the science known today about BSE and appropriate measures to protect human health."

 

The OIE's negligible risk standard is given only when a country has had a satisfactory feed ban in place for at least eight years, and for seven years has met certain obligations for mandatory reporting and investigation of all cattle showing clinical signs consistent with BSE, as well as examination and awareness programs.

 

Terpstra called Japan's position "questionable," particularly because she said more than one-third of Japanese slaughterhouses themselves still use a "pithing" process that is not OIE-consistent. The pithing process involves inserting an object into an animal's brain to lacerate brain tissue, and is not used in the US, according to a USDA fact sheet. The OIE recommends allowing imports of meat produced from animals slaughtered using pithing only if the cattle are from a negligible risk country.

 

On China, Terpstra said the US and China strongly disagree on what policies should govern US exports of beef to China in light of the OIE guidelines.

 

The US suggested it would be "helpful" if both China and the US aimed to "clarify" with experts what the OIE guidelines mean with respect to meat trade, Terpstra said.

 

A USDA official this week explained that China is "only looking at th[e] initial 'free to trade' list" of the OIE guidelines. The first page of the OIE's BSE rules, found in Article 2.3.13.1 of the Terrestrial Animal Health Code of 2007, lists cattle products on which countries "should not require any BSE related conditions." These products include boneless beef, milk, semen, hides, protein-free tallows, blood and dicalcium phosphate.

 

The official said China disagrees with the US' interpretation that in addition to allowing these "free to trade" goods, countries should also accept beef that the OIE recommends should be accepted from controlled risk countries provided the SRMs are removed.

 

Despite the obstacles, Conner pointed out that US beef exports are up 17 percent for the first eight months of this year, which amounts to roughly 500,000 tonnes, but stil down from its pre-2003 record levels.

 

Terpstra made a similar point when she said the year-to-date figure for 2007 is US$4.7 billion in exports, up from US$3.9 billion for the comparable period a year earlier. Overall, US exports of beef and other cattle products fell from US$7.5 billion in 2003, before the US' first BSE case, to US$6 billion in 2006, she said.