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U.S., EU sign tariff rate quota agreement

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Agreement enables U.S. to preserve existing access to EU market following UK's exit.

United States Trade Representative Katherine Tai, Sweden’s Permanent Representative to the European Union (EU) Ambassador Mikael Lindvall, and European Commission Deputy Director General for Agriculture and Rural Development Michael Scannell have officially signed the U.S. – EU Tariff Rate Quota (TRQ) Agreement. The agreement, once implemented, will enable the U.S. to preserve its existing access to the EU market for various agricultural commodities following the United Kingdom’s exit from the EU on January 1, 2021.

The new TRQ allocations are based on the historic pattern of agricultural exports to the 27 EU member states. The agreement will restore favorable market access for multiple U.S. agricultural products, including for U.S. rice, almonds, wheat, and corn. 

While details were agreed to some time ago and have already been implemented by the UK, U.S. Meat Export Federation (USMEF) Vice President of Economic Analysis Erin Borror said the terms are significant for the red meat industry in that a large portion of the pork quotas were shifted to the UK, a primary European destination for U.S. pork.

Borror explained that all of the U.S.-specific pork tariff rate quota (TRQ), which covers boneless hams and loins, was allocated to the UK, totaling 4,922 metric tons (mt). The other pork TRQs are not country-specific and were apportioned between the UK and the EU, the largest of which is also for boneless hams and loins and was split 29,545 mt to UK and 5,720 mt to EU. The in-quota duty for boneless hams and loins to the UK is £209.21 per mt.

For beef, 1,000 mt of the Hilton quota was shifted from the EU to the UK, leaving 10,500 mt with the EU. But the Hilton quota carries a 20% duty and is separate from the EU’s duty-free high-quality beef (HQB) quota, which has a U.S.-specific allocation of 27,800 metric tons this year, or 6,950 mt per quarter. Borror said the U.S. allocation of the HQB quota will eventually reach 35,000 mt in 2026 and subsequent years.

“Since the HQB remains with the EU, there is currently no duty-free access for U.S. beef into the UK,” Borror said, adding that exports to the UK are either at full duty (12% + £253 per mt) or at 20% ad valorem within the 1,000 mt portion of the Hilton quota apportioned to the UK.

“USMEF appreciates USTR’s efforts on behalf of the U.S. meat industry.”

In the first eleven months of 2022, the U.S. exported $11.1 billion worth of agricultural goods to the EU. 

 

 

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