News & Events | The New EU Beef Quota: How Can You Benefit?

The New EU Beef Quota: How Can You Benefit?

Implementation of the new duty-free quota for beef exported to the European Union is rapidly moving forward, raising questions from producers and exporters about quota details, timelines and participation requirements.

“While the new quota is limited to non-hormone-treated beef, we believe that it offers significant potential for the U.S. beef industry,” said USMEF President and CEO Philip Seng. “There are certain realities we must face when it comes to the EU, including its steadfast resistance to lifting the hormone ban. But with duty-free access significantly lowering the cost of doing business in Europe, we feel the U.S. industry has the capability of making stronger inroads into this market.”

One area of confusion has been the issue of whether the new quota is limited exclusively to U.S. products. The answer to this question is no, because international trade rules require that the quota be open to all World Trade Organization (WTO) members. To ship under the quota, U.S. exporters will be required to meet the same High Quality Beef definition (outlined below) as suppliers from other countries.

Other facts and timelines regarding the EU agreement:

In August, the EU will open a new 20,000 metric ton (44.1 million pound) tariff rate quota for high quality beef at an in-quota tariff of zero. This is in addition to the existing 11,500 metric ton (25.4 million pound) tariff rate quota which carries an in-quota tariff of 20 percent. The U.S. will continue to apply retaliatory tariffs to a reduced list of products exported from the EU.
After three years and subject to the agreement of both the EU and the U.S., the tariff rate quota will be increased to 45,000 metric tons (99.2 million pounds) and the retaliatory tariffs will be lifted from EU exports of all of the remaining affected products.
During the fourth year of the agreement, the two parties will address the duration and terms of the agreement after the fourth year.
Both parties have the right to withdraw from the agreement at any time and return to previous terms of trade.
After the agreement has been in effect for 18 months, both parties have the right to initiate litigation in the WTO on the EU’s hormone ban.
Exports under the new “High-Quality Beef” (HQB) quota must meet a product definition similar to the definition currently applied to HQB beef exports to the EU under the 11,500 metric ton (25.4 million pound) quota shared with Canada. The components of this definition are: beef from cattle less than 30 months of age, on feed for at least 100 days with minimum energy and intake requirements, and carcasses must be quality graded. While beef-exporting countries other than the United States have access to the quota, it is unlikely that a significant portion of their production will meet this product definition.

Carcass rinses used for the purpose of pathogen reduction currently are not allowed for beef exported to the EU. However, the EU is expected to begin its risk assessment of these carcass rinses by the middle of 2010, and has indicated that it should complete its scientific assessment and reach a final decision within the next three years.

For near-term implementation of the first phase of the agreement, producers and processors should be aware of the following schedule:

July 2009 implementation steps:

Feedlots involved in the NHTC Program should immediately have their rations reviewed by a nutritionist to ensure compliance with the new HQB definition. This information, along with feeding records, must be submitted to AMS for verification.
Feedlots approved by USDA for feeding requirements should begin issuing affidavits attesting to the fact that NHTC cattle have been fed in a manner that meets the new feeding requirements. These affidavits will accompany the cattle when they are transported to the slaughter plant.
AMS graders should begin signing a verification of evaluation for all carcasses from NHTC cattle.
Based on these two documents, AMS will begin issuing statements of verification (SOVs) attesting to the fact that the beef meets the new feeding and grading requirements. These SOVs will provide the basis for FSIS signing certificates of authenticity (COAs) for product that meets the new feeding and grading requirements.
USDA will notify the European Commission that FSIS is authorized to issue COAs for the new quota.
The EU published the regulation implementing the new quotaJuly 13, and it is now available online. For any product produced and shipped before July 13, COAs for the new High Quality Beef definition will be issued at a later date.
FSIS has not yet begun issuing COAs for product that meets the new feeding and grading requirements, but COAs should be available soon.
Product can be produced and shipped before the date of publication. COAs will be issued for this product after the date of publication.

Aug. 1, 2009:

The implementing regulation goes into effect.

Aug. 1-4, 2009:

Importers can apply for licenses for the first 2,000 metric ton (4.4 million pounds) allotment of product under the new quota. Licenses are valid for 90 days.

Aug. 14, 2009:

Import licenses for the first tranche are issued.
First day that product can be imported into the EU under the new quota at zero duty.
Product arriving in the EU prior to Aug. 14 can be held in bonded cold storage until the importer receives its import license.
For product to clear customs documents must include the new COA.

Additional Notes on the Import Licensing System:

The quota year will run from July 1 to June 30.
For the quota year beginning on July 1, 2010, and all future years, the quota year will be divided into 12 monthly periods.
The quantity available in each period will equal one-twelfth of the total quantity, plus any unused quota from the previous month(s).
The 2009-10 quota year will be divided into nine monthly periods (October-June) and one two-month period (August-September).
The quantity available in each period will be 2,000 metric tons (4.4 million pounds).
For the two-month period, applications for import licenses will be accepted from Aug. 1-4.
For the nine monthly periods, applications for import licenses will be accepted during the first seven days of the month preceding the start of the period. For example, applications for October will be accepted from Sept. 1-7.
For the two-month period, licenses will be issued from Aug. 14-21.
For the monthly periods, licenses will be issued between the 23rd day and the final day of the month in which the applications were submitted. For example, licenses for October will be issued from September 23-30.
For the two-month period licenses will be valid for three months from the date of issue.
For all succeeding periods licenses will be valid for three months from the first day of the period for which they were issued. For example, licenses issued from Sept. 23-30 will be valid for three months beginning Oct. 1.

If you have any further questions about export requirements or details of the EU beef agreement, please contact USMEF Export Services at 303-623-6328.

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The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.