As the U.S. and the European Union signed a beef-specific trade agreement, the president proclaimed American beef the best in the world.
On Friday, Aug. 2, President Donald Trump, U.S. and European Union (EU) trade representatives, and representatives from several U.S. beef industry groups met in the Roosevelt Room to sign a new trade agreement. The new agreement will almost triple the volume of U.S. beef exported to the EU.
The signing came a month after the European Commission, the EU’s executive branch, announced the agreement as reported in the June 24 issue of WLJ. The new agreement guarantees the U.S. 35,000 metric tons (mt) of an existing 45,000-mt, duty-free beef quota, phased in over the course of seven years. The quota was created in 2009 to satisfy a World Trade Organization (WTO) ruling against the EU. However, after the quota was created, most of it was filled by other countries.
“This agreement will nearly triple the duty-free access of American ranchers to high quality beef in Europe,” commented U.S. Trade Representative Robert Lighthizer at the signing event.
Lighthizer estimated current duty-free U.S. beef exports to the EU at 13,000 mt, valued at $150 million annually. Once the agreement is passed and fully implemented, the 35,000-mt trade would be valued at $420 million.
“With this new, exclusive country-specific quota, American ranchers have a guaranteed market share in Europe,” Lighthizer continued.
Jennifer Houston, president of the National Cattlemen’s Beef Association (NCBA), spoke at the signing, thanking the president and the U.S. trade team for their diligence.
“For years, it’s been difficult for us to get access to the European Union because of some non-tariff and restricted tariff trade practices. And we want them to be able to enjoy the high-quality beef that our American farmers and ranchers produce everywhere, that’s enjoyed by the rest of the world.”
The U.S. has largely been shut out of the European market due to the EU’s stringent demands for beef from non-hormone-treated cattle (NHTC). This guaranteed larger share of the EU quota still only applies to NHTC beef. Though the quota was originally intended for U.S. product, other EU trade partners and U.S. competitors like Australia, Argentina, and Uruguay were able to take advantage of it too.
Talks that led to this agreement began in September 2018.
“This agreement provides more reliable and consistent access to the EU market and will be a tremendous boost for the U.S. beef industry,” said Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF), in the group’s official response to the agreement.
Halstrom additionally said the agreement “sends a very positive signal” to U.S. beef producers who are interested in the NHTC market. NHTC feeder calves have been consistently scoring premiums well over $20/cwt in the big video sales, according to WLJ observation.
“One of the reasons that growth in NHTC production has been somewhat sluggish is because access to the European market has been rather unpredictable and not terribly reliable,” Joe Schuele, vice president of communications for the USMEF, explained to WLJ in June.
“It’s a big commitment to enter into the NHTC business and I think producers have been looking for some assurances that there’s going to be a destination for that product. This should help in that respect.”
Kent Bacus, NCBA’s director of international trade, also described the agreement as bringing some certainty to the European market for U.S. cattle producers during last week’s Beltway Beef podcast.
But there are still some uncertainties remaining. Though the agreement has been signed by U.S. and EU trade representatives, it’s not a done deal yet.
“While it still has to go through the EU Parliament—it has to be ratified before it is implemented—we see this as a victory,” Bacus said early last week.
“That is an important step to still move forward. Europe unfortunately doesn’t always follow through with their promises, but, the good thing is we have an administration here that believes in enforcing trade deals and believes in holding our trade partners accountable. So we’re fairly certain the EU is going to move forward with this.”
Both of the EU trade representatives who attended the signing made similar statements; expressing optimism about the future while acknowledging existing challenges.
Jani Raappana, the Deputy Chief of Mission at the Embassy of Finland (as representative of the Presidency of the Council of EU) who participated in the signing described the agreement as “a solution to our longstanding dispute in the WTO.”
“Let me underline that the negotiations for this agreement we are conducting is good spirit and it’s a great example of how the multilateral trading system can work for settling trade disputes. With this agreement, the EU reaffirms its commitment to a positive transatlantic trade agenda and a new phase in the EU-U.S. relationship.”
Stavros Lambrinidis, an EU ambassador from Greece who participated in the signing, highlighted the ongoing efforts at cooperation between the U.S., the EU, and the WTO. He claimed that trade is not only about money, but values, and highlighted the U.S.-EU agreement as an example of partnership and fair trade.
“[T]he agreement that we signed today shows us, as partners, we can solve problems. And as partners, together in the spirit of this partnership, we can also try to shape a world that is based on strong, open values and strong, open rules.” — WLJ