Beef-producing states told the World Trade Organization (WTO) last week that they fear a deal between the U.S. and the European Union (EU) to open up European markets to high-quality beef will impact their exports.
The complaints, highlighting commercial sensitivities in the financial crisis, could lead to a new trade dispute over a deal hailed by Washington and Brussels as a breakthrough after more than two decades of wrangling over the hormone issue. The U.S. and the EU reached a provisional agreement recently to end a two-decades-long row over an EU ban on hormone-treated beef by increasing the European import quota for other beef. Brussels says the new quota, whose details are still being worked out, is open to all WTO members.
But some beef exporters, mainly from Latin America, fear it’s been designed to let in U.S. beef at their expense.
"The Memorandum of Understanding in question ... defined high-quality meat solely as those of the type exported by the USA," Uruguay said in a statement to the WTO's dispute settlement body. Beef accounts for 25% of Uruguay's exports and the EU is its biggest market.
Under the deal reached with the U.S., the EU will provide additional duty-free access for 20,000 tons of non-hormone-treated beef a year for three years, rising to 45,000 tons in the fourth year.
This is in addition to the current import quota of 60,000 tons, on which exporters pay duty of 20%. Imports outside the quota pay 100%. Within the existing quota, the U.S. has a share of 11,500 tons. Uruguay says it fears the U.S. will capture all the new quota.
"In a word, the USA would move from having 19% of the quota for high-quality meat to 54%, and Uruguay and all other producers would now face a competitor with a unique and exclusive zero-duty tariff," Uruguay says.
Australia, Argentina, Brazil, India, New Zealand, Nicaragua and Paraguay also voiced their concern at the deal.
The EU says it would notify WTO members in early August of the details of the new quota. It would cover beef from cattle with a special diet, and other objective characteristics.