U.S. Poised to Reinstate Tariffs Tied to EU Beef Ban

The International Trade Practice Center on Bloomberg Law® provides in one comprehensive, time-saving resource.

By Len Bracken

The U.S. is poised to reinstate punitive tariffs on an array of European Union agricultural products in response to the long-standing EU ban on the import of hormone-treated beef, the Office of the U.S. Trade Representative said Dec. 22 in a press statement.

“The EU has failed to live up to assurances to address this issue, and it's now time to take action,” U.S. Trade Representative Michael Froman said in the statement that noted the European Commission argued this issue should be resolved through the Transatlantic Trade and Investment Partnership, which both sides have said will not be completed in the near future.

The World Trade Organization authorized the additional U.S. tariffs with a total annual trade value of $116.8 million in 1999 after ruling the previous year that the EU ban on hormone-treated beef was not based on a risk assessment in accordance with WTO rules, the statement said. USTR added that the EU’s ban on U.S. beef is not based on sound science and continues to discriminate against American beef producers.

Tariffs on Cheese, Ham

The tariffs on items such as Italian mineral water, French Roquefort cheese and Danish ham were imposed by the U.S. but phased out beginning in 2009 when the EU agreed in a memorandum of understanding to allow a quota of beef produced without growth-promoting hormones. The tariffs were terminated in 2011.

The National Cattlemen's Beef Association said in a statement that countries not party to the U.S.-EU Memorandum of Understanding on High-Quality Beef are unfairly filling much of the 45,000 metric ton quota that is not subject to duties.

The EU has lowered the definitional standard of high-quality beef so that Australia, Uruguay and Argentina are able to fill much of the quota, according to a U.S. trade analyst who said the quota was originally designed to keep out beef from other major exporting countries because it is reserved for grain-fed cattle, whereas high-quality beef from other countries comes from grass-fed cattle.

The European Union Delegation to the U.S. could not be reached for comment.

Islam Sidiqqui, a former chief agricultural negotiator at USTR during the Obama administration, told Bloomberg BNA that it was about time the EU allow market access for the U.S. high-quality beef, as agreed to in the memorandum of understanding. Sidiqqui, who is currently a senior adviser at the Center for Strategic and International Studies, a nonprofit research organization, said even though the 2009 duty-free quota of 25,000 metric tons was augmented to 45,000 metric tons in 2012, U.S. producers have not benefited as much as U.S. policymakers think should be the case.

Beef Industry Request

The USTR said it is acting at the request of U.S. beef producers on the WTO case dating to 1997 by scheduling a public hearing and seeking public comment with a notice slated to be published Nov. 23 in the Federal Register. Public comments are due Jan. 30 and the public hearing will be held Feb. 15, 2017.

Several senior lawmakers expressed strong support for the action by USTR. House Ways and Means Chairman Kevin Brady (R-Texas) said in a statement that the hearing and public comment announcement is a “huge step” that allows the U.S. to determine how to hold the EU accountable for its unfair trade practices against U.S. beef.

“I look forward to stepping up our efforts with the Trump Administration in the coming months to regain market access for American beef and to hold the EU accountable when it attempts to bend trade rules at the expense of U.S. workers and businesses,” Brady said.

Sen. Pat Roberts (R-Kan.), chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, said in a statement that the U.S. beef industry produces the safest, most affordable beef in the world.

“Unfortunately, the EU has chosen to limit the ability of U.S. beef producers to compete in the EU market by establishing a non-science based barrier to trade,” Roberts said. “Our government must take proactive steps to enforce the rules of international trade, as it is critical to the American beef industry.”

To contact the reporter on this story: Len Bracken in Washington at lbracken@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

For More Information

The USTR press statement is available at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2016/december/obama-administration-takes-action.

The NCBA statement is available at http://www.beefusa.org/newsreleases1.aspx?newsid=6128.

The Federal Register from USTR notice is available at http://src.bna.com/kXe.

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request International Trade Practice Center on Bloomberg Law