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farm406
During phase I (2009-2011), the United States could export up to
20,000 metric tons of beef from cale that were not treated with growth-
promoting hormones. Aer the initial 20,000 tariff-free metric tons, a tariff
would be applied. (Such a "tariff rate quota" essentially limits U.S. exports
to the tariff-free portion—the 20,000 tons—because the tariff amount
on the additional imports would make the costs of those sales exceed the
revenues). In the second (2012) and third (2013 and forward) phases of
process, the tariff-free quota would be raised to 45,000 metric tons, and
the United States would suspend and not apply additional tariffs on
EU products.
However, as the figure below shows, despite imports of U.S. beef into
the European Union increasing, they never reached the 45,000 metric
ton volume. A major reason for this is that when the EU–US MOU was
established, other major beef exporting countries cried foul: How can the
EU be giving preferential treatment to the United States but not its other
trade partners? As a result, the European Union opened the 45,000 metric
ton tariff rate quota agreement to other countries, such as Argentina,
Australia, Canada, New Zealand, and Uruguay. at is, the EU said: We're
allowing a total of 45,000 metric tons of beef imports without tariffs, but
all the exporters can fight amongst themselves to determine who gets
different portions of this total tariff-free amount.
Allowing this type of competition for tariff-free beef imports has
essentially placed a ceiling on the U.S. portion of exports to the EU. As
the figure above shows, U.S. beef exports to the EU has consistently
averaged around 16,500 metric tons per year, less than half of what the
original MOU discussed. In response, the U.S. Trade Representative's
office under the Obama administration began the process of determining
what retaliatory actions it could employ under the original 1998 WTO
ruling, because, they argued, the EU were not complying to the 2009
Memorandum of Understanding by allowing other countries to participate
in the 45,000 ton tariff rate quota. e Trump administration has
continued this process.
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