The European Union will now allow duty-free imports of up to 20,000 tonnes of Canadian beef per year in a trade concession valued at over $10 million annually.
The new quota, announced Tuesday by federal Agriculture Minister Gerry Ritz and International Trade Minister Peter Van Loan, won’t end an ongoing dispute between Canada and the EU over beef products from cattle treated with hormones, but commits the two parties to work on that issue as well.
“The access to this quota was a priority for our industry and therefore it was a priority for this government,” Ritz said in a release. “This is a tremendous deal that will help Canadian producers make their living from the marketplace.”
The arrangement with the EU will provide duty-free access to a 20,000-tonne quota for hormone-free beef exports to the European market. The Canadian Beef Export Federation has estimated this access alone could be worth over $10 million a year, the government said.
“The European Union is a high-income market willing to pay the higher cost of beef produced from cattle without growth promotants, but for years our access has been limited to a small quota at a 20 per cent duty,” Canadian Cattlemen’s Association president Travis Toews said Tuesday in a separate release.
“Finally we can start to scratch the potential of this market.”
The 20,000-tonne most-favoured nation quota is for beef from animals not administered growth hormones as per the relevant EU import requirements, the government said.
Further steps to come include increasing the original 20,000 tonnes to 45,000 tonnes in 2012 and a staged addition of a further 3,200 tonnes for a total quota amount of 48,200 tonnes, the CCA said.
Beef from animals treated with growth hormones is approved for use in Canada but is banned from import into the EU.
Canada has had World Trade Organization approval since 1999 for retaliatory trade duties on some goods it imports from the EU, after Ottawa and Washington took the EU policy to the WTO in 1997.
The 20,000-tonne quota for hormone-free beef stems from related compensation negotiations between the U.S. and EU. The U.S. and Australia already have access to such a quota, the CCA noted.
The Canadian government said Tuesday it has also now finalized a separate memorandum of understanding (MOU) with the European Commission, the oversight body for EU legislation.
The MOU, the Canadian government said, “sets the path towards the resolution” of the WTO dispute on hormones and is expected to eventually add 3,200 tonnes to the 20,000-tonne quota.
The new MOU also calls for compensation for the EU’s ban on beef from cattle given the prohibited hormones, the government said.
“I see this new access as an important foothold that bodes well for further things to come as Canada and the EU work toward establishing a comprehensive economic and trade agreement,” said Toews, who farms at Beaverlodge, Alta.
Canada and the EU committed to trade talks in October last year, and launched a fifth round of negotiations last month toward such an agreement.
Meanwhile, Toews said, the quota agreement should “provide those who are already producing cattle without growth promotants with new marketing options and encourage others to prepare for what remains on the horizon.”