We may be able to send more beef to the European Union… eventually.
On Friday, June 14, the European Commission, the executive branch of the European Union (EU), announced that the U.S. will get a much larger, dedicated share of the existing duty-free beef import quota. Exactly when this will happen is still unknown, however.
According to the commission’s announcement, 35,000 metric tons (mt) of the existing 45,000 metric-ton quota for imported beef will be allocated to the U.S. This won’t happen all at once, however. The agreement must be cleared by the EU’s Council and Parliament. This approval process is expected to take a while. Once approved, the U.S. will see its allocated quota start from 18,500 mt then gradually increase to 35,000 mt over the course of seven years. The increased quota allocation will still only apply to beef from non-hormone treated cattle (NHTC).
The U.S. has largely been shut out of the European market due to the EU’s stringent demands for NHTC beef. As a result of a World Trade Organization dispute with the U.S., the EU created the 45,000-mt duty-free quota in 2009.
Though the quota was originally intended for U.S. product, other EU trade partners were able to take advantage of it too. U.S. competitors like Australia, Argentina, and Uruguay effectively ate into U.S. market share. For example, the U.S. exported only 21,273 mt of beef and beef variety meat to the EU in 2018, and records do not indicate how much of that was under the quota or via other means. Talks to deal with this situation started September 2018.
Joe Schuele, vice president of communications for the U.S. Meat Export Federation, described the move as positive, but told WLJ that problems persist.
“You have this 45,000-ton quota administered on a quarterly basis, so that’s 11,250 metric tons available every quarter,” he explained, describing the beef import process as essentially a race to get product cleared through customs duty free.
“Two or three weeks into every quarter that available capacity is more or less exhausted,” he continued.
“So a customer seeking U.S. beef in any significant quantity then has to wait over two months to clear anymore product duty free. They can bring in product under what’s called the Hilton quota, which carries a 20 percent duty, but it’s very difficult to do that in a profitable manner.”
However, an expanded quota allocation to the U.S. could create greater certainty for U.S. producers of NHTC beef.
“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,” Schuele explained.
“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.” — Kerry Halladay, WLJ editor
