The Confederation of food and drink industries of the EU (CIAA) welcomes the bilateral agreement between the EU and US on the beef hormone dispute, initialled yesterday evening in Geneva. Ten years of retaliation have had severe consequences for many EU food producers. The USA is the first foreign destination for European food and drink products with value of exports exceeding €10 billion[1]. Considering the importance of this market, CIAA was seriously alarmed by the US announcement that it planned to rotate the list of products subject to retaliation. This would have resulted in great economic damage to EU food and drink exports and made access to the US market completely unpredictable[2].

Speaking after the agreement was announced, CIAA President, Jean Martin said ” We are glad this threat has not materialised and that normal access to the US market for European products is now in sight.” He continued, “The European Food & Drink Industry has long awaited this settlement and now urges both sides to resolve the issue definitively”.

Indeed the retaliation list will not disappear immediately. The value of applied retaliation will decrease only gradually, and some products will continue to be held hostage for another three years. Understandably, this is difficult to accept for producers directly concerned by the retaliatory measures. Moreover, the new agreement leaves the issue of the legitimacy of the EU ban unsettled, which means that further US claims cannot be excluded in the future.

Nevertheless, CIAA has strongly supported the European Commission in its endeavours to negotiate trade compensations with the US and believes that today, the overall outcome of negotiations is acceptable. We are grateful to the European Commission and EU decision-makers for their efforts in finding a workable solution for the EU food and drink industry.

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[1] Source: Eurostat

[2] NOTE TO EDITORS: In 1998, the WTO Dispute Settlement Body declared the EU ban of hormone treated beef incompatible with the WTO-SPS agreement. The next year, the US obtained authorisation from the WTO Dispute Settlement Body for retaliation measures worth $116.8 million and put in place 100% duties for a range of products, targeting mostly the countries particularly in favour of the ban. In 2003, the EU changed its legislation in order to comply with the WTO rules and notified the WTO of this change. The US did not recognise the amendments as satisfactory and continued the retaliation. On 5 January 2009, the US authorities announced changes to the list of products covered by retaliation and implementation of the so called “carousel law”. This law obliges the US Trade Representative to change the products on the retaliation list every 6 months unless there is an opposite claim from US industry. The new list would have targeted additional 45 new products from 26 EU Member States, while the original list targeted 14 European countries, most notably French producers of typical French products. The changes should have entered into force on 23 March 2009. This deadline was postponed first by a four-week period and then a further two weeks to allow time for bilateral negotiation and settlement of the dispute.

For more information:

http://www.ustr.gov/assets/Document_Library/Federal_Register_Notices/2009/January/asset_upload_file64_15289.pdf

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