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Secretary Perdue Statement on Japan’s Planned Tariff Increase on U.S. Frozen Beef

July 28, 2017, WASHINGTON – The government of Japan has announced that rising imports of frozen beef in the first quarter of the Japanese fiscal year (April-June) have triggered a safeguard, resulting in an automatic increase to Japan’s tariff rate under the WTO on imports of frozen beef from the United States.  The increase, from 38.5 percent to 50 percent, runs August 1, 2017 and last through March 31, 2018.  The tariff affects only exporters from countries, including the United States, which do not have free trade agreements with Japan currently in force.

U.S. Secretary of Agriculture Sonny Perdue issued the following statement: “I am concerned that an increase in Japan’s tariff on frozen beef imports will impede U.S. beef sales and is likely to increase the United States’ overall trade deficit with Japan.  This would harm our important bilateral trade relationship with Japan on agricultural products.  It would also negatively affect Japanese consumers by raising prices and limiting their access to high-quality U.S. frozen beef.  I have asked representatives of the Japanese government directly and clearly to make every effort to address these strong concerns, and the harm that could result to both American producers and Japanese consumers.”
U.S. exports of beef and beef products to Japan totaled $1.5 billion last year, making it the United States’ top market.

U.S., China Finalize Details to Send U.S. Beef to China

June 12, 2017, Washington, D.C.– As part of the U.S.-China 100-Day Action plan announced on May 11, 2017 by U.S. Secretary of Commerce Wilbur Ross and Secretary of the Treasury Steven T. Mnuchin, the Trump Administration today has taken important steps toward commercial shipment of U.S. beef and beef products to China for the first time since 2003.  These shipments are results of the U.S.-China Comprehensive Economic Dialogue co-chaired by Secretary Ross and Secretary Mnuchin for the United States and Vice Premier Wang Yang for China.  Accordingly, the U.S. Department of Agriculture has reached agreement with Chinese officials on final details of a protocol to allow the U.S. to begin the beef exports to China.  Secretary of Agriculture Sonny Perdue today announced the posting of technical documents related to the beginning of shipments.

Secretary of Agriculture Sonny Perdue issued the following statement:

“Today is a great day for the United States and in particular for our cattle producers, who will be regaining access to an enormous market with an ever-expanding middle class.  Since he was elected, President Trump has brought momentum, optimism, and results to American agriculture families that we haven’t seen in years and this agreement is a great example.  I commend the hard work of Secretary Ross, Secretary Mnuchin, Trade Representative Robert Lighthizer, and our USDA representatives.  Without their dedication and persistence, this would have not been possible.  I have no doubt that as soon as the Chinese people get a taste of American beef they’ll want more of it.”

Secretary of Commerce Wilbur Ross issued the following statement:

“President Trump is doing more to improve the U.S.-China relationship than any president in decades, and this final beef protocol agreement represents even more concrete progress. As we clear away long-standing issues like this one, focusing on near-term, verifiable deliverables, we are building a sound foundation for further discussions.  I look forward to engaging with our Chinese counterparts as we address more complex issues to the benefit of both our nations.”

Secretary of the Treasury Steven T. Mnuchin issued the following statement:

“The ‎reopening of China’s market to American beef is an example of the results-oriented approach this Administration has taken in our engagement with China. We will continue to work toward a more fair and balanced economic relationship with China by expanding opportunities for U.S. workers and businesses.”

U.S. Trade Representative Robert Lighthizer issued the following statement:

“I welcome China taking this important step to start allowing U.S. beef imports after shutting them out over 13 years ago.  The President’s firm commitment to fair trade that benefits the United States has made this new U.S. beef export opportunity possible.  I encourage China and all countries to base their requirements on international standards and science.  America’s ranchers are the best producers of beef in the global economy, and they can compete and succeed wherever there is a level playing field.”

Background:

The USDA Agricultural Marketing Service (AMS) has posted the requirements for its Export Verification program for U.S. establishments shipping to China, which will enable packers to apply for approval to export to China.  The USDA Food Safety and Inspection Service (FSIS) has also updated its online Export Library specifying China’s requirements for certifying U.S. beef being shipped there.

China has emerged as a major beef buyer in recent years, with imports increasing from $275 million in 2012 to $2.5 billion in 2016. However, the United States has been banned from China’s market since 2003. The United States is the world’s largest beef producer and was the world’s fourth-largest exporter, with global sales of more than $5.4 billion in 2016.  Until the ban took effect, the U.S. was China’s largest supplier of imported beef, providing 70 percent of their total intake.

Following today’s announcement that the U.S. and China have finalized an agreement allowing for American beef exports, House Agriculture Committee Chairman K. Michael Conaway (TX-11) and Livestock and Foreign Agriculture Subcommittee Chairman David Rouzer (NC-07) made the below comments:

“As one of the world’s largest importers of beef, China has long-been an area of great opportunity for the U.S. beef industry. Well today that ‘great opportunity’ becomes a one step closer to reality for cattle producers across the country, hopefully bringing an end to a 13-year drought on beef exports to China. America’s ranchers raise the best and highest quality beef in the world, and I applaud the administration for its work to move this agreement across the finish line,” said Chairman Conaway.  

“Today’s announced agreement that U.S. beef producers will have access to China’s market, the world’s largest, is a major achievement. The opening of this market is estimated to be worth $2.6 billion for the U.S. beef industry, and I applaud the Trump administration in negotiating this great deal which will benefit our nation’s cattlemen, the agriculture community, and help grow our economy and create more jobs,” said Subcommittee Chairman Rouzer.

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U.S. Beef Soon To Arrive On Chinese Consumers’ Plates

Progress in U.S. – Chinese negotiations may have finally opened the door for U.S. beef exports to resume entry into China’s 2.5 billion marketplace. Rod Bain, Kent Bacus of the National Cattlemen’s Beef Association, Agriculture Secretary Sonny Perdue.

Following one more round of technical consultations between the United States and China, China is to allow imports of U.S. beef on conditions consistent with international food safety and animal health standards and consistent with the 1999 Agricultural Cooperation Agreement, beginning as soon as possible but no later than July 16, 2017.

Administration Takes Action to Address European Union’s Unfair Trade Practices against U.S. Beef Industry

Obama Administration takes first steps toward reinstating trade action against EU, scheduling a public hearing and seeking public comments on U.S. beef industry’s request

U.S. beef industry exports average $6 billion per year, producing an estimated $7.6 billion in economic activity and supporting 50,000 jobs nationwide

Washington, D.C. – The Obama Administration announced today that the Office of the United States Trade Representative (USTR) is taking action against the European Union’s (EU) unfair trade practices that discriminate against U.S. beef imports.  Acting on the request of the U.S. beef industry, USTR has scheduled a public hearing and is seeking public comments in connection with the EU’s ban on most U.S. beef products.  The EU’s ban on U.S. beef is not based on sound science and discriminates against American beef farmers, ranchers, and producers.  If the trade action resumes, the United States would reinstate industry-supported tariffs on a list of EU products imported into the United States.  USTR is particularly interested in comments addressed to the possible effects of reinstatement on U.S. consumers and small- or medium-sized businesses.

“The WTO determined that the European Union’s ban on U.S. beef imports violates its international trade obligations,” said Ambassador Froman. “The EU has failed to live up to assurances to address this issue, and it’s now time to take action. Today’s action holds the EU accountable and is an important step in encouraging the Commission to come back to the table to ensure that American ranchers have access to Europe’s market and that European consumers have better access to high-quality U.S. beef.”

In 1998, the EU lost a case at the WTO for banning American beef. In 2009, the U.S. negotiated an agreement to allow a modest degree of market access for specially-produced beef that meets the EU’s standards, but that agreement has not worked as intended. The European Commission had argued that this issue should be resolved through T-TIP. However, given that European officials decided after their trade minister’s meeting in September not to complete T-TIP this year, now is the time to take action.

The U.S. beef industry exports an average $6 billion per year. These exports produce an estimated $7.6 billion in economic activity and support 50,000 jobs nationwide. The American beef industry is essential to the overall strength of the nation’s economy, and to rural communities seeking ways to access new customers in foreign markets.

“American ranchers raise some of the best beef on the planet, but restrictive European Union policies continue to deny EU consumers access to U.S. beef at affordable prices. For several years we have been asking the EU to fix an agreement that is clearly broken, despite its original promise to provide a favorable market for U.S. beef,” said Agriculture Secretary Tom Vilsack. “The U.S. beef sector is vital to our economy. U.S. beef and beef product exports average $6 billion per year, producing an estimated $7.6 billion in annual economic activity and supporting nearly 50,000 jobs nationwide. The industry is essential to the overall strength of the nation’s economy, and to rural communities seeking ways to access new customers in foreign markets.

An interagency committee of trade experts and economists will participate in the hearing and review public comments on the particular products and EU member States that may be subject to the imposition of additional duties, with the goal of resolving this dispute. Complete information on the submission of comments is set forth in a Federal Register Notice that is published today on the USTR website (www.ustr.gov) and will be available shortly on the Federal eRulemaking Portal (www.regulations.gov).

“There is no doubt that American beef products are safe. The 20 year EU ban has been in effect far too long. It is not based on fact and should be lifted,” said House Agriculture Committee Ranking Member Collin Peterson. “The beef industry is an important contributor to our nation’s economy, especially rural economy. This announcement is welcome news for America’s beef producers.”

“The EU, our largest trading partner, unfortunately maintains numerous unscientific policies focused on protecting European agriculture producers from competition with American producers rather than promoting food safety,” said Representative Adrian Smith, member of the House Ways and Means Committee and Chair of the Modern Agriculture Caucus. “It also closes off many more markets to U.S. producers in countries around the world which defer to the EU on these regulatory issues. I commend USTR for moving forward on this enforcement action, and I will continue to push the EU to adopt scientific regulations which will enhance trade and food security across the globe.”

Additional Background Information

The beef industry’s request is based on a 1998 WTO ruling in the EU beef dispute that the European ban on the import of meat and meat products from animals treated with certain hormones was not supported by scientific evidence and thus violated WTO obligations.  In 1999, the WTO authorized the United States to impose additional tariffs on EU products with a total annual trade value of $116.8 million. Consistent with this authorization, the United States imposed additional duties on products from certain EU member States.

In 2008, the WTO confirmed that the United States has a continuing right to impose trade measures until the EU beef dispute is resolved. In January 2009, USTR announced a decision to change the products subject to additional duties, consistent with the list of products approved by the WTO in 1999.  USTR delayed the decision, however, to permit further negotiations with the EU to resolve the dispute.

In May 2009, the United States and the EU signed an MOU under which the EU agreed to create a new duty-free quota for imports of specially-produced beef.  Since 2009, in exchange for the elimination of increased U.S. tariffs on EU imports, the MOU has provided an opportunity for U.S. producers to export additional beef to the EU market, as intended by the parties.  However, in recent years the U.S. beef industry has been prevented from gaining the intended benefits from the MOU because of increased imports under the duty-free quota from non-U.S. suppliers.

REMARKS ON BEHALF OF U.S. BEEF PRODUCERS

“We fully support USTR’s decision to use the means available to it under U.S. law to defend the interests of the U.S. beef industry … The U.S. beef industry has supported our government’s efforts to find a commercially feasible way for us to participate in the EU market. The 2009 agreement initially appeared to represent a step in that direction, but unfortunately it has not lived up to the industry’s expectations. Under the circumstances, we cannot agree to stand by as our competitors take an ever-expanding share of a quota that was specifically created to compensate the United States.”— Phillip Seng, President and CEO of the U.S. Meat Export Federation

“Our temporary agreement with the E.U. was meant to be an opportunity to build a bridge of trust between U.S. beef producers and E.U. consumers, and to compensate the United States for the losses we have suffered as a result of the E.U.’s hormone ban. The E.U. has violated the spirit of that agreement and caused U.S. beef exports to become a minority interest in a quota meant to compensate U.S. beef producers.”— Tracy Brunner, President of the National Cattlemen’s Beef Association

“It is imperative that the EU honor its original agreement with the U.S. We will continue to work with the U.S. government to ensure fair access for our products and support today’s move to reinstate tariffs.”— Barry Carpenter, President and CEO of the Meat Institute

Statement by U.S. Trade Representative on China’s Announcement to Resume U.S. Beef Trade

September 22, Washington, D.C. – USTR recognizes today’s announcement from China’s Ministry of Agriculture that it has lifted the ban on U.S. beef following a recently concluded review of the U.S. supply system. While this announcement is a critical first step to restoring market access for U.S. beef and beef products, China and the United States must complete other steps before U.S. beef can be exported to China.

USTR and USDA look forward to China’s final audit report on beef, and subsequent discussions between the United States and China on the specific conditions that will allow trade to resume.  True access to China’s beef market -consistent with science-based, international standards for trade- remains a top priority for the United States. The United States produces the highest-quality beef in the world, and China’s 1.3 billion consumers are an important market for U.S. producers. The Obama Administration, USTR and USDA will continue to press trading partners to eliminate unfair barriers to trade that hamper American farmers and ranchers.

Background on the current U.S. Beef Market

Following the discovery of a case of bovine spongiform encephalopathy (BSE) in December 2003, U.S. beef and beef product exports fell. Since 2003, USTR and USDA have led a multi-agency, full-court press, dedicating significant resources to restore foreign market access for U.S. beef. As a result, U.S. beef shipments had regained pre-BSE volumes by 2011 and even reached record values by 2014. Another central element of the U.S. strategy to maintain and expand foreign market access is insistence on policies that are based on the guidelines of the World Organization for Animal Health (OIE). Since January 2015, the United States has gained additional market access for U.S. beef in 16 countries, including: Colombia, Costa Rica, Egypt, Guatemala, Iraq, Lebanon, Macau, New Zealand, Peru, Philippines, Saint Lucia, Singapore, Saudi Arabia,  South Africa, Ukraine, Vietnam and Brazil.

The past seven years have represented the strongest period in history for American agricultural exports, with international sales of U.S. farm and food products surpassing $1 trillion between fiscal years 2009 and the present.

Snapshot of the Beef Export Market in 2003

In FY 2003, U.S. beef exports (excluding beef products) totaled $3.0 billion (0.9 million tons) to 112 countries. As a result of the December 2003 BSE case, U.S. beef exports fell to $1.1 billion (0.3 million tons) in FY 2004.

Snapshot of the Current Market

In spite of some remaining restrictions, U.S. beef exports have recovered to pre-2003 levels. In FY 2015, U.S. beef exports totaled $5.8 billion (0.8 million tons) to 112 countries.