The United States and the European Union signed a Memorandum of Understanding (MOU) in their dispute over the EU’s import ban on U.S. beef produced with hormones.
Terms of the MOU:
For three years after the MOU is signed:
1. EU will provide duty-free access for 20,000 metric tons of ‘high-quality’ hormone free beef on an MFN (Most-Favored Nation) basis. Any nation that qualifies to ship ‘high-quality’ beef to the EU can use the quota, but the U.S. is the most likely to qualify.
2. ‘High-quality’ hormone-free beef imports over 20,000 tons will fall under the existing quota program and will pay the duty rate.
3. The existing retaliation program of duties on the current group of imported products from the EU will continue.
During the fourth year after the MOU is signed:
1. Duty-free access will rise to 45,000 metric tons of ‘high-quality’ hormone-free beef annually.
2. The existing quota program and duty-rate will continue for imports over the 45,000 tons.
3. Retaliatory duties will be eliminated.
4. Negotiations on a long-term agreement will begin.
The MOU also calls for the parties to refrain from any further litigation on the beef hormone dispute for eighteen months after the agreement is finalized. In the agreement, ‘high-quality beef’ is defined as: ‘beef cuts obtained from carcasses of heifers and steers less than 30 months of age which have only been fed a diet, for at least the last 100 days before slaughter, containing no less than 62 percent of concentrates and/or feed grain co-products on a dietary dry-matter basis’. The U.S. currently exports approximately 7,000 metric tons of ‘high-quality’ hormone-free beef to the EU annually.