Here’s another one of those cases that just won’t go away. The U.S. beef industry has asked the Office of the United States Trade Representative to reinstate retaliatory action against the European Union, due to the EU’s continued limits on beef imports from the United States. USTR, in turn, has opened the case for public comments and a hearing. Since this action could result in imposition of crippling tariffs on merchandise exported from EU countries, U.S. importers should pay close attention.
A Longstanding Dispute
Here’s the history. In the late 1990s, USTR filed a successful challenge, in the World Trade Organization, to the EU’s ban on imports of beef from animals that had been given certain growth hormones. The EU refused to modify the ban after the WTO finding that it violated international trade rules. This refusal led the U.S. to impose retaliatory tariffs on various products imported from EU member countries. The prohibitively high tariff rates were intended to induce the EU to seek a solution to the dispute.
To some extent, that strategy worked. In 2009, the two sides negotiated a Memorandum of Understanding providing greater market access to U.S. beef in exchange for reduced retaliatory duties. Under the MOU, the EU implemented a tariff-rate quota system for non-hormonally treated beef. The initial TRQ level permitted imports of 20,000 metric tons at a zero rate of duty; this was later expanded to 45,000 metric tons. For its part, the U.S. removed the retaliatory duties.
Where’s the Beef?
The gist of the current complaint is that the EU’s administration of the TRQ has not offset the harm caused by the hormonal beef import ban, in part because beef exports from third countries can take advantage of the TRQ. The U.S. beef industry has, accordingly, requested USTR to take additional action to address this issue. The measures available to the United States may include re-imposition of retaliatory measures.
USTR has established a schedule to consider the renewed controversy. It will hold a hearing on February 15, 2017. Written comments and requests to appear at hearing are due by January 30, 2017. Post-hearing rebuttal comments must be submitted by February 22, 2017.
There is no certainty that the U.S. government will agree with the beef industry’s request for action or, if it does, what form that action will take. Nevertheless, importers of products from European Union countries should be aware that increased tariffs are possible, should the proceedings go in that direction. The retaliatory tariffs were 100 percent ad valorem, effectively shutting the U.S. market to the affected products. A listing of the goods affected before the MOU went into effect is found in this Federal Register notice.
