June 13, 2019
By Philip Blenkinsop
BRUSSELS (Reuters) – The European Union has agreed a deal to allow U.S. farmers a larger share of Europe’s beef market, EU sources and diplomats said, in a move that could help to defuse transatlantic trade tensions.
The deal will result in the United States securing a guaranteed share of a 45,000 tonne EU quota for hormone-free beef. The quota was agreed in 2009 to settle a dispute between the two over an EU ban on the use of growth hormones in meat.
U.S. farmers initially dominated the quota, but under World Trade Organization (WTO) rules it also had to be made available to non-U.S. suppliers.
Australia and Uruguay, and more recently Argentina, have steadily increased their exports, pushing down the U.S. share of the quota to about 30%.
The European Commission, which coordinates trade policy for the 28 EU countries, has struck a deal with the United States for U.S. farmers to gain an initial 18,500 tonnes of the quota, rising to 35,000 tonnes after seven years, EU sources said.
But for the arrangement to be WTO compliant it also needed to secure agreement from “substantial” suppliers.
Australia has confirmed it reluctantly accepted the adjustment and EU diplomats said that Argentina and Uruguay had also accepted the change.
The EU is currently in free-trade negotiations with Australia and with South America’s Mercosur trade bloc, of which Argentina and Uruguay are members. In both sets of talks, increased shipments of beef to Europe is a key demand.
Europe is also offering to start negotiations on a trade deal with the United States to remove import duties on industrial goods, though the two sides are stuck over the issue of market access for agriculture. Washington says it should be part of the talks but the EU is united in ruling it out.
The trade talks are part of an agreement struck last year between Commission chief Jean-Claude Juncker and U.S. President Donald Trump, under which the United States agreed not to impose punitive tariffs on EU car imports while the two sides sought to improve transatlantic trade ties.
The beef issue is technically a separate matter.
However, with Trump now threatening to impose car tariffs from November and agriculture a clear sticking point, the beef deal would be a way for the European Union to show it is a clear trade ally.
(Reporting by Philip Blenkinsop; Editing by David Goodman)