EU Ups the Steaks With Bigger U.S. Share of Beef Quota

(Bloomberg) --

The U.S. moved a step closer on Thursday to gaining greater access to the European Union beef market, an economic win for American farmers suffering from global tariff wars induced by President Donald Trump’s protectionism.

The European Parliament voted to give the U.S. almost 80% — or 35,000 metric tons — of the bloc’s annual quota on hormone-free beef. Under the plan, approved by EU lawmakers, the U.S. share will be 40% initially and gradually increase over the ensuing six years.

This marks a rare bright spot in transatlantic trade ties amid EU frustration at the Trump administration over:

• Tariffs it imposed last year on European steel and aluminum based on controversial national-security grounds
• U.S. duties introduced in October on a range of EU goods from planes to spirits in retaliation over subsidies to Airbus that were judged to be illegal
• A refusal by Washington to begin negotiations to cut levies on industrial goods because of Europe’s rejection of widening the scope of talks to include agriculture
• A looming deadlock on the World Trade Organization’s appellate body, to which the U.S. has refused to consider any new appointments
• The Trump administration’s lingering threat of imposing auto tariffs on European carmakers

Negotiated in June by European Farm Commissioner Phil Hogan, who is due to become EU trade chief on Dec. 1, the beef offer to the U.S. involved persuading Australia, Argentina and Uruguay to cede chunks of the bloc’s overall 45,000-ton import quota.

The amount was set a decade ago to settle a transatlantic dispute over an EU ban on meat from cattle that were given growth hormones. WTO rules required the volumes to be made available to other nations that export beef, and Australia, Argentina and Uruguay gradually replaced the U.S. as the largest suppliers.

In short, American farmers are regaining through political forces what they lost through economic ones.

In a sign of how keen the EU is to deliver on the deal in time for it to take effect in January, the 28-nation Parliament brought forward its vote from December. That leaves only EU governments to give their rubber stamp by year-end.

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Nothing could be more American than pecan pie at Thanksgiving — right? Well, not this year, says Bloomberg Opinion’s David Fickling. The trade war and Hurricane Michael mean a bigger slice of the pie for Chinese and Mexican growers. 

Today’s Must Reads

• Malmstrom’s blockbusters | Over the past five years as the EU’s trade chief, Cecilia Malmstrom has reached deals to expand more than 295 billion euros of the bloc’s commerce with the rest of the world. We look at her legacy.
• Falling flat | Exports of Japanese beer to South Korea fell to virtually zero in October as Korean consumers shunned products from their Asian neighbor amid a dispute over shared history that has sent relations plunging.
• Swiss industrial support | Switzerland is going ahead with plans to eliminate import tariffs on industrial goods, a bid to combat the country’s high prices. 
• Sights on France | The U.S. will announce on Monday what retaliatory action, if any, it will take in response to a digital tax France instituted this year that will hit large American tech companies.
• Torpid trade | Global trade will shrink through the end of the year as countries around the world continue to grapple with a manufacturing-led slowdown, according to an index by freight giant DHL, which fell to a four year-low in November.

Economic Analysis

• China productivity | A global environment less conducive to trade and technology flows means the road ahead will be bumpier. 
• Tariff waivers | Candy lollipops in a plastic container, single-speed bikes, and bagless vacuum cleaners are among nearly three dozen products exempted from a 25% tariff on Chinese imports, the U.S. Trade Representative’s office said.

Coming Up

• Nov. 29: Vietnam exports
• Dec. 1: South Korea exports
• Dec. 5: U.S. trade balance

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net, Craig StirlingRichard Bravo

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