EU reaches deal on long-running beef dispute
EU products such as France's Roquefort cheese and Italian mineral water narrowly escaped new US import duties this week following an agreement between the two sides on Wednesday (6 May) over US hormone-treated beef.
The deal will see the EU quadruple the amount of non-hormone treated beef it imports from the US in return for a US commitment not to increase duties on certain EU food products from the current level of $38 million to $116.8 million.
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The issue of the EU's refusal to import US beef from cattle that have been fed hormones has been sidestepped however.
In a joint statement, EU trade commissioner Catherine Ashton and US trade representative Ron Kirk said the move was a "pragmatic way forward" in the dispute that has rumbled on for over a decade.
"An agreement is in our mutual interest, and we will now discuss this with our respective stakeholders and constituencies in an effort to finalize it as soon as possible," they said in a joint statement.
Approval is needed from EU member states and the US congress before the agreement can stick.
For over a decade the EU has refused to import US beef from cattle that have been fed on hormones on the grounds that it can cause health problems such as cancer.
The US dispute this, saying there is no scientific evidence to back up the claim. In 1996 the US took the EU decision to the World Trade Organisation which two years later ruled in favour of the US, allowing it to impose import duties on EU goods as a retaliatory measure.
In its dying days, the Bush administration decided to up ramp up the import duties allowed under the WTO ruling on the targeted EU products that also include truffles, sausages, oats and chewing gum.
Producers of these products have been greatly concerned that the higher duties - due to kick in this Saturday – would have resulted in dramatically lower sales in the US.
Under the new deal reached on Wednesday, the US will maintain its existing tariffs on the products for three years before scrapping them altogether during the fourth year.
In return the EU will allow duty-free access to a further 20,000 tons of US beef a year for the first three years from cattle that have not been fed on hormones, rising to 45,000 in year four. Currently 11,500 tons are allowed per year.
"Reaching an agreement on this issue will be a clear sign of our commitment to working through - and, where possible, resolving - the bilateral disputes in our trade relationship," Kirk and Ashton said.