EU and US Reach Provisional Agreement in Beef Dispute

First step taken to resolve dispute that has stretched two decades.

U.S. Trade Representative Ron Kirk and European Union Trade Commissioner Catherine Ashton agreed in principle on Wednesday on a proposal that would open the EU market to U.S. beef.

For the past 20 years the EU has imposed a trade barrier against U.S. beef, citing the use of growth hormones as the reason for it. Since 1999 the U.S. has been imposing $116.8 million in retaliatory sanctions on various European goods. As recently as October 16, 2008, the World Trade Organization Appellate Body confirmed that the U.S. has the right to continue imposing these sanctions until the dispute is resolved.

Under the proposed plan the amount of U.S. beef allowed into the EU duty free would quadruple to 45,000 metric tons during the next four years. Under the terms of the agreement, the U.S. would agree not to impose new so-called 'Carousel' sanctions which were due to come into force this week and would affect a range of EU products. Before the end of the four-year period, the two sides will seek to agree on the conditions for the settlement applicable beyond that period.

"We appreciate the leadership and persistence of Ambassador Kirk and his USTR team in getting this process moving in the right direction after 20 years of unsuccessful efforts," said Gregg Doud, NCBA chief economist. "Once approved, this will be a positive step forward in our goal of expanding U.S. beef market access, but we still have a long way to go before this issue is resolved to our satisfaction."

Doud pointed out that this accommodation conceded nothing in terms of the science; it is simply changing the terms of the payment plan. "This gives the U.S. beef industry an opportunity to gain duty-free access to one of the most valuable markets in the world. But this does not resolve the hormone dispute," Doud said.

American Meat Institute President J. Patrick Boyle agreed that this provisional agreement is an encouraging first step towards restoring beef trade between the U.S. and EU, which he says is long over due.

"Given the support from scientific communities in both the U.S. and the EU, we hope that the member states will approve this agreement," Boyle said. "While this is only a first step, we are hopeful that it is represents movement in ending the trade friction that has existed for so long. We hope that this initial opening will lead to a larger and fuller restoration of beef trade in the future."

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