Beef deal with EU calls for Canada to drop sanctions

A tentative agreement with the European Union would see European nations expand market access for Canadian beef, while Canada would drop all related trade sanctions in exchange.

The European Commission, the oversight body for EU legislation, said in a release Thursday that the EU and Canada have signed a memorandum of understanding in a years-long dispute over Europe’s ban on hormone-treated beef.

The EU’s “non-discriminatory” ban has been in place since the early 1980s and was challenged by both Canada and the U.S. at the World Trade Organization starting in 1996.

As a result, both Canada and the U.S. were given WTO permission in 1999 to impose retaliatory sanctions on a number of European exports to a value of $11.3 million. In Canada’s case, the sanctions are in the form of a 100 per cent duty on various EU meat products.

The memorandum signed Thursday would see the EU extend its duty-free tariff-rate quota on “high-quality” Canadian beef by an additional 1,500 tons until August 2012. That quantity could be increased to 3,200 tons for the following year, the European Commission said.

Canada would then suspend its sanctions, and Canada and the EU in 2013 would then “assess the situation and decide whether to reach a permanent settlement of the case,” the commission said.

“Important step”

Both the suspension of Canada’s sanctions and the increase to the EU tariff-rate quota “remain subject to the domestic decision-making procedures,” the commission said.

“Today’s memorandum is an important step in solving this long-running dispute,” EU trade spokesperson John Clancy said Thursday in the commission’s release. “It will relieve EU exporters from the cost of paying sanctions on the Canadian market.”

A similar memorandum was signed between the EU and the U.S. in 2009.

The Canadian government said in late November that it had finalized this memorandum with the commission, as part of a related announcement that Canada had gained access to a separate 20,000-tonne duty-free quota on hormone-free beef, shared with the U.S. and Australia.

The government said at that time that the new memorandum, when signed, would call for compensation for the European bloc’s ban on beef from cattle given the hormones the EU had prohibited. Compensation was not mentioned in the European Commission’s release Thursday.

Having been blocked from shipping to Europe for about two decades, Canada will have to work hard to rebuild demand, market observers have said.

“If Canada can export up to 3,000 tonnes to Europe in one year, I think that would be a success story. But that will take a lot of hard work,” Christoph Weder, a columnist for Canadian Cattlemen, said in an interview with Commodity News Service Canada in December.

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