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Business

EU, US reach deal to end beef, cheese spat

Latest update : 2009-05-07

The European Commission and the US announced a provisional deal to end a long-standing dispute over an EU ban of US hormone-treated beef. The deal lifts the threat of new retaliatory duties on EU products imported to the US, such as Roquefort cheese.

AFP - The United States and the European Union agreed Wednesday to bury the hatchet in their dispute over US hormone-treated beef, one of the longest and most bitter transatlantic trade rows.
  
The deal, which still has to be finalised, lifts the threat of new retaliatory duties on EU products ranging from Roquefort French cheese to Italian mineral water, which were due to be imposed later this week.
  
In exchange, Europe will nearly quadruple its quota for duty-free imports of non-hormone treated US beef in the coming years.
  
US Trade Representative Ron Kirk and EU Trade Commissioner Catherine Ashton said the deal offered a "pragmatic way forward" in a dispute that has long been a thorn in the side of one of the closest trade relations in the world.
  
"An agreement is in our mutual interest, and we will now discuss this with our respective stakeholders and constituencies in an effort to finalize it as soon as possible," they said in a joint statement.
  
The agreement would provide additional duty-free access to the EU market for US beef produced from cattle that have not been treated with growth-promoting hormones, the statement said.
  
The access would begin with 20,000 tons of beef -- in addition to 11,500 already allowed -- in the first three years and increasing to 45,000 tons beginning in the fourth year.
  
The dispute has been festering since 1988 when the EU banned US beef on the grounds that American beef producers made use of certain growth-promoting hormones that were not authorised in the European bloc.
  
The World Trade Organization, the global trade watchdog, ruled 11 years ago that the ban was inconsistent with WTO rules, allowing the United States to slap retaliatory duties on European products.
  
Under the agreement reached between Kirk and Ashton, Washington will maintain existing sanctions but will not impose new duties on EU products during the initial three-year period, according to the statement.
  
Washington will eliminate all sanctions during the fourth year.
  
The two sides will also refrain from further WTO litigation regarding the EU's ban on beef treated with hormones for at least 18 months.
  
Before the end of the four-year period, the two sides will seek to conclude a longer-term agreement, the statement said.
  
"Reaching an agreement on this issue will be a clear sign of our commitment to working through -- and, where possible, resolving -- the bilateral disputes in our trade relationship," Kirk and Ashton said.
  
"We will continue our close cooperation on other outstanding issues in the future," they said.
  
The row took a turn for the worse in the final days of George W. Bush's presidency, when Washington decided to impose the new tariffs on European products in retaliation for the EU ban on US hormone-treated beef.
  
Under the decision, US duties on French Roquefort cheese were due to triple this week, which has grated on nerves in France, where the pungent, mouldy delicacy is considered a national icon.

Date created : 2009-05-07

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