Brussels, 14 May 2009 - The representatives of the European Communities (EC) and United States to the World Trade Organization in Geneva signed yesterday evening a Memorandum of Understanding on a provisional solution to the long-running dispute over hormone-treated beef. This Memorandum provides for a substantial reduction of sanctions imposed by the United States on European products, while the EC will improve market access opportunities for high quality beef, a product traditionally exported by the United States.
The memorandum provides for three phases:
Phase 1 will last three years. The United States will maintain a reduced level of sanctions on EU products of USD 38 million instead of USD 116 million. The United States also agrees not to impose so-called Carousel sanctions. This legislation would have meant that existing sanctions would have rotated to new products every six months, affecting EU exports worth over USD 200 million to the United States, including products such as mineral waters, Roquefort cheese, fruit juices and canned peaches. In return for the US assurances not to raise sanctions, the EC will open a tariff rate quota, on an autonomous and MFN basis, for imports of 20,000 tons of high quality beef at zero duty. This beef will be in line with all EU import requirements, including that it must be hormone-free.
The memorandum provides for the possibility to advance to Phase 2 in the fourth year. The United States would then suspend the remaining sanctions on EU products, while the EC would increase the size of the tariff rate quota for high quality beef to 45,000 tons. During phase 2 the United States and the EC would also discuss whether to extend the agreement into a phase 3, the duration of which remains to be discussed (including the possibility to make the arrangement permanent), together with other issues such as the status of the WTO dispute on Beef Hormones.
The Memorandum also provides a roadmap for the WTO dispute on Beef Hormones pending a definitive solution that may be agreed under Phase 3. The Memorandum is without prejudice to the EC and United States legal position in the Hormones dispute. The EC and United States agree however not to request a compliance panel for the first 18 months following the beginning of phase 1. If a compliance panel is launched after this date, such a panel will not render its report to the parties during phase 1 or phase 2. The status of such panel report, if any, will be clarified in phase 3.
WTO Dispute Settlement: Memorandum on Beef Hormones dispute signed with the United States.