It's always been a challenge selling US beef into the European Union. This goes back to the 1980's when they first banned product coming from cattle with hormone implants. Since that time the US has challenged the EU in the World Trade Organization courts. This US has won each time and there has had a significant penalty against European exports into the US that were eventually negotiated away back in 2009 when the EU agreed to open a duty-free import quota for beef produced from non-hormone-treated cattle (NHTC) raised under specific feeding and grading conditions.
US Meat Export Federation (USMEF) Senior Vice President for Trade Access Thad Lively said the US has seen beef exports into the EU grow, but now there is a significant problem.
"In 2009 the Europeans agreed to create a new quota which would have no duty," Lively said. "That quota would be for product that would meet a specific definition, very similar to the product we produce here in the United States. We started shipping under that quota and saw good grow in our exports but over the years since then the EU has permitted other countries to also ship under the quota. Not surprisingly the volumes have increased dramatically and even through we've seen increases in the US beef exports under the quota each year, Australia and Uruguay in particular have really ramped up their shipments."
Radio Oklahoma Network Farm News Director Ron Hays featured Thad Lively of USMEF on Tuesday's Beef Buzz program. You can listen to feature by Clicking on the LISTEN BAR below
While the current quota year does not end until June 30, this is an issue of immediate concern. The quota is administered on a quarterly basis, with an allocation of 12,050 mt reserved for each quarter. In the current quota year that began on July first it looks like the quota is going to be filled. Lively said the first quarter of the total quota has been nearly filled, so as we go through the year the pressure on the quota is only going to grow.
With a total duty-free quota capacity of 48,200 mt, the U.S. industry would seem to have plenty of room for further growth, but its not turning out that way. With expanding volumes from the U.S., Australia and Uruguay, the allocation for this quarter has already reached the “critical” phase - meaning that it is more than 90 percent filled, and European importers must now post a bank guarantee for the full duty in order to clear new shipments prior to Oct. 1.
It appears as through the EU is trying to pull a fast one on the US. Back in 2009 the US gave up their retaliation against the EU for their refusal to allow US beef from cattle that have been implanted into their country. It's a trade barrier in the mind of the trade courts. The US basically gave away that right to impose their tariffs against the EU in exchange for the duty-free quota for never-ever beef.
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