Action to Address EU's Unfair Trade Practices Against U.S. Beef Industry

Contact: Matt Swenson, Office of the U.S. Trade Representative, mswenson@ustr.eop.gov, (202) 395-6654

WASHINGTON, Dec. 22, 2016 – The Obama Administration announced today that the Office of the United States Trade Representative (USTR) is taking action against the European Union’s (EU) unfair trade practices that discriminate against U.S. beef imports.  Acting on the request of the U.S. beef industry, USTR has scheduled a public hearing and is seeking public comments in connection with the EU’s ban on most U.S. beef products.  The EU’s ban on U.S. beef is not based on sound science and discriminates against American beef farmers, ranchers, and producers.  If the trade action resumes, the United States would reinstate industry-supported tariffs on a list of EU products imported into the United States.  USTR is particularly interested in comments addressed to the possible effects of reinstatement on U.S. consumers and small- or medium-sized businesses.

"The WTO determined that the European Union's ban on U.S. beef imports violates its international trade obligations," said Ambassador Froman. "The EU has failed to live up to assurances to address this issue, and it's now time to take action. Today's action holds the EU accountable and is an important step in encouraging the Commission to come back to the table to ensure that American ranchers have access to Europe's market and that European consumers have better access to high-quality U.S. beef."

In 1998, the EU lost a case at the WTO for banning American beef. In 2009, the U.S. negotiated an agreement to allow a modest degree of market access for specially-produced beef that meets the EU's standards, but that agreement has not worked as intended. The European Commission had argued that this issue should be resolved through T-TIP. However, given that the EU stated in September that they did not view the completion of T-TIP this year to be possible, it is now time to take action.

The U.S. beef industry exports an average $6 billion per year. These exports produce an estimated $7.6 billion in economic activity and support 50,000 jobs nationwide. The American beef industry is essential to the overall strength of the nation’s economy, and to rural communities seeking ways to access new customers in foreign markets.

"American ranchers raise some of the best beef on the planet, but restrictive European Union policies continue to deny EU consumers access to U.S. beef at affordable prices. For several years we have been asking the EU to fix an agreement that is clearly broken, despite its original promise to provide a favorable market for U.S. beef,” said Agriculture Secretary Tom Vilsack. “The U.S. beef sector is vital to our economy. U.S. beef and beef product exports average $6 billion per year, producing an estimated $7.6 billion in annual economic activity and supporting nearly 50,000 jobs nationwide. The industry is essential to the overall strength of the nation’s economy, and to rural communities seeking ways to access new customers in foreign markets.”

An interagency committee of trade experts and economists will participate in the hearing and review public comments on the particular products and EU member States that may be subject to the imposition of additional duties, with the goal of resolving this dispute. Complete information on the submission of comments is set forth in a Federal Register Notice that is published today on the USTR website (www.ustr.gov) and will be available shortly on the Federal eRulemaking Portal (www.regulations.gov).

"There is no doubt that American beef products are safe. The 20 year EU ban has been in effect far too long. It is not based on fact and should be lifted," said House Agriculture Committee Ranking Member Collin Peterson. "The beef industry is an important contributor to our nation's economy, especially rural economy. This announcement is welcome news for America's beef producers."

"The EU, our largest trading partner, unfortunately maintains numerous unscientific policies focused on protecting European agriculture producers from competition with American producers rather than promoting food safety,” said Representative Adrian Smith, member of the House Ways and Means Committee and Chair of the Modern Agriculture Caucus. “It also closes off many more markets to U.S. producers in countries around the world which defer to the EU on these regulatory issues. I commend USTR for moving forward on this enforcement action, and I will continue to push the EU to adopt scientific regulations which will enhance trade and food security across the globe."

Additional Background Information

The beef industry’s request is based on a 1998 WTO ruling in the EU beef dispute that the European ban on the import of meat and meat products from animals treated with certain hormones was not supported by scientific evidence and thus violated WTO obligations.  In 1999, the WTO authorized the United States to impose additional tariffs on EU products with a total annual trade value of $116.8 million. Consistent with this authorization, the United States imposed additional duties on products from certain EU member States.

In 2008, the WTO confirmed that the United States has a continuing right to impose trade measures until the EU beef dispute is resolved. In January 2009, USTR announced a decision to change the products subject to additional duties, consistent with the list of products approved by the WTO in 1999.  USTR delayed the decision, however, to permit further negotiations with the EU to resolve the dispute.  

In May 2009, the United States and the EU signed an MOU under which the EU agreed to create a new duty-free quota for imports of specially-produced beef.  Since 2009, in exchange for the elimination of increased U.S. tariffs on EU imports, the MOU has provided an opportunity for U.S. producers to export additional beef to the EU market, as intended by the parties.  However, in recent years the U.S. beef industry has been prevented from gaining the intended benefits from the MOU because of increased imports under the duty-free quota from non-U.S. suppliers. 
 
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