November 23, 2010 / 2:26 PM / in 7 years

Canada gets duty-free beef quota to EU

WINNIPEG, Manitoba (Reuters) - Canada has gained duty-free access to the European Union for a 20,000-tonne annual quota of beef, Canada’s agriculture and trade ministers said on Tuesday, in a move aimed at resolving a longstanding dispute amid talks on a broad free trade agreement.

The quota for beef from cattle not raised with growth hormones is worth about C$10 million ($9.8 million) annually, and matches access that Europe has already granted to the United States.

Hormone treatments are widely used in North America to speed cattle growth and reduce feed costs, leading the EU over 20 years ago to restrict North American beef over health concerns.

Canada Agriculture Minister Gerry Ritz said only Canada, the United States and Australia have this level of access to the EU beef market.

“After two decades, our producers will again have (tariff-free) access,” he told Reuters in an interview.

Ritz said the WTO ruled in Canada’s favor on the beef hormone dispute with the EU several years ago, and the quota is the negotiated result of that ruling.

He said Canada will make the case for further access in ongoing talks with the EU.

Canada and the European Commission have finalized a memorandum of understanding aimed at a final resolution of the long-standing WTO dispute that will ultimately add 3,200 tonnes to the 20,000 tonne quota, Ritz said.

A person familiar with the situation said the draft memorandum is similar to that between the United States and EU and would see Canada lift its sanctions against imports of European beef, pork and cucumbers, which it had imposed as retaliatory measures.

The access is important for Canadian ranchers because Europe is a high-income market willing to pay the higher cost of beef from cattle raised without growth hormones, said Travis Toews, president of the Canadian Cattlemen’s Association.

“Finally we can start to scratch the potential of this market,” he said.

The draft memorandum looks to be finalized either just before Christmas or in January, said Roger Waite, spokesman for agriculture and rural development at the European Commission, who declined to comment on the contents of the agreement.

Expanding access is a good step, but the quota is small, said Kevin Grier, senior market analyst at the Canadian agriculture research organization George Morris Center.

Tariffs are only one barrier to meat exports to the European Union, with protocols for processing plants and production methods also restricting trade, Grier said.

“European tariffs are often the least of our problems.”

Canada and European Union officials have held discussions on a broad free trade agreement for about a year.

($1=$1.02 Canadian)

Additional reporting by Juliane von Reppert-Bismarck in Brussels; Editing by David Gregorio

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