The announcement by the EU on Friday that it has ring-fenced 35,000t of the 45,000t hormone-free beef quota for the USA will hopefully conclude a dispute that has been running since the 1990s.

When the EU imposed a ban on the use of growth-promoting hormones in beef production in 1988 on the precautionary principle, the US brought an action to the World Trade Organisation (WTO), which adjudicates on matters relating to international trade disputes between members.

History

The WTO ruled in favour of the USA against the EU ban on hormone-treated beef from the USA, because there was no scientific basis for the decision in 1998.

The USA was authorised to charge retaliatory tariffs on EU exports to the USA, which were in place for the next decade.

Following prolonged negotiations, the EU and US reached agreement in 2009 whereby the EU would create a tariff-free quota of 45,000t of hormone-free beef access to the EU.

Initially. the USA was the only country in a position to avail of this, but as it was open to all-comers, in time Argentina, Canada, Australia, Uruguay and New Zealand availed of the quota.

TTIP break down

While the TTIP negotiations were ongoing between the USA and EU, it had been hoped that these would provide a long-term resolution.

However, even before President Trump was elected in November 2016, these talks were in trouble and late that year, the US sought to reopen the issue because their share of the hormone-free quota had dipped to one third.

Since President Trump came to power, maintaining trade relations with the USA has been akin to walking on eggshells.

He has had spats with China, Mexico and Canada in particular, but the EU has also been on his radar more in the context of cars and the auto industry than agriculture.

The ability for the US to replace China with the EU as a market for soya has provided a positive export story and, so far, the hormone-beef issue has stayed below the President's radar, at least in the context of imposing tariffs.

Other deals

By concluding this deal at 35,000t for the USA and 10,000t among the other countries for tariff-free beef sales to the EU, it may not completely satisfy the US, but it is enough for now.

No doubt, the other countries will be unhappy, but they have, in the case of Canada, concluded their own free trade deal (CETA), which provides for 45,000t tariff-free access to the EU in their own right.

Australia and New Zealand are currently in the process of negotiating their own separate free trade agreements with the EU and will expect to achieve quota access in their own right.

It is the same with Uruguay and Argentina, who are both members of Mercosur, and the speculation is that a deal with generous beef quota is close between the EU and Mercosur as well.