The U.S. Trade Representative this week announced a meaningful first step in the longstanding trade dispute between the United Sates and European Union over the use of growth promotants in cattle. The National Cattlemen’s Beef Association has been working closely with industry and USTR on this issue for several years.

"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.”

Under the current tariff-rate quota, the EU allows 11,500 metric tons of hormone-free, high-quality, grain-fed (“Hilton”) beef imports each year from the United States. Upon approval, this new accommodation provides for an additional 20,000 MT at zero duty. After three years, it will allow an extra 25,000 MT, for a total of 45,000 MT at zero duty. USTR and industry will closely monitor the terms of the agreement, and should it not be carried out satisfactorily, the United States reserves the authority to reinstate carousel duties on EU exports to the United States

The EU has cited the use of growth-promoting hormones in U.S. cattle as the reason for imposing a trade barrier on U.S. beef for the past 20 years — despite the fact that these growth promotants have all been scientifically proven safe through rigorous Food and Drug Administration testing.

In response to the EU’s unjustified trade barrier, the United States has been imposing $116.8 million in retaliatory sanctions on various European goods since 1999. As recently as Oct. 16, 2008, the World Trade Organization Appellate Body confirmed that the United States has the right to continue imposing these sanctions until the dispute is resolved.  In January of this year, USTR announced plans to modify — or “carousel” — the list of goods subject to increased tariffs in order to step up pressure on the EU. On April 22, the day before the carousel rotation was set to take effect, USTR announced it would delay the rotation until May 9 in order to provide more time to negotiate a settlement.

“This accommodation conceded nothing in terms of the science; it is simply changing the terms of the payment plan,” Doud explained. “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.”