The news that France has joined Ireland, The Netherlands and Lithuania in getting access to the US beef market has been welcomed across EU political and industry circles alike. It represents another step in leaving the BSE legacy, which still hangs over the European industry, behind.

Symbolic

Its importance, however, is more symbolic than commercial. The US is one of the largest beef importers, as well as exporters in the world. Their import requirement is mainly for manufacturing beef that is used in burgers while they are a huge exporter of steak meat. Their main export destinations are Canada, Mexico, Japan and other Asian and Middle Eastern countries where all the top restaurants carry US beef steaks on their menu.

The big suppliers of manufacturing beef to the US are Australia, New Zealand potentially Brazil who got approval to supply the US market in the middle of last year. Australia is the biggest supplier to the US by a considerable distance, exporting almost 420,000t to the US in 2015. This is just 120,000t less than Ireland's total exports. Interestingly, drought in Australia meant a huge drop in Australian production in 2016, with exports to the US just over half of what they were the previous year at 240,000t.

Volumes

In joining Ireland as an approved supplier to the US, France will also sell relatively low volumes. To the end of October, Ireland had exported just over 1,500t to the US, less than half of one percent of total Irish exports. Although approval was obtained for the sought-after manufacturing beef, Irish factories still haven’t agreed protocols on testing for various strains of E coli that are taken out in the US processing system using an acid wash that is not in favour in Europe.

Irish exports since the start of 2015 when Irish approval was secured have concentrated on high-value steak meat and other hind quarter muscles as well as the skirt meat. For Ireland, it has been an important symbolic approval rather than a real commercial opportunity – Hong Kong and the Philippines bought ten times as much Irish beef in 2016 as the US did. Aside from prevailing market conditions that have restricted Irish export opportunities, there is also the issue of tariff quotas. France will join Ireland and Brazil in using the 64,000t beef quota that the US has for countries that don’t have individual quota deals as the Australians, New Zealanders, Canadians and Uruguayans do. If Brazil gets serious about supplying the US, they have potential to use this in two months which then would leave sales from Ireland and France subject to WTO tariff rates which are around 25%.

While US approval won’t be a huge commercial opportunity for France just as it hasn’t been for Ireland, securing approval is still a major prize for any country. Having USDA approval gives the holder a major endorsement when seeking access to other global markets as USDA approval is internationally recognised as the gold standard. This is the real significance of French and previously Irish approval to supply the US.

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