MTPR

New Trade Agreement Could Boost Montana Beef Exports To Europe

Jun 17, 2019
Originally published on June 17, 2019 2:57 pm

A new trade agreement announced Friday could mean more Montana beef makes its way to European consumers. 

The European Union’s agreement with the U.S. would essentially double the amount of imported beef from American cattle that have not been treated with growth hormones.

“This is a really great deal for the United States, especially because European Union has a lot of high-income consumers who may be willing to pay for that premium-quality beef,” says Anton Bekkerman, a professor with Montana State University’s Department of Agricultural Economics and Economics.

Bekkerman says high-quality beef is something Montana producers do really well. Another advantage is that Montana already has a robust system in place to verify cattle were raised without growth-promoting hormones.

“So I think the infrastructure is there for Montana producers to take advantage of this ruling,” says Bekkerman.

The E.U. allows 45,000 metric tons of non-hormone-added beef to be imported tariff-free each year. America’s share has consistently averaged around 16,500 tons per year, which is far below what was agreed upon in a memorandum of understanding from a decade ago.

The Obama administration kicked off the trade agreement negotiations, which was continued by the Trump administration. If approved, American beef imports would increase to 35,000 tons after seven years, gaining almost 80 percent of the quota. Australia, Argentina and Uruguay who were not involved in the original MOU would lose big shares of the quota as a result.

The agreement must still be endorsed by E.U. member states and the U.S., and be approved by the European Parliament.

“Unless something crazy comes up, this is the final ruling that we’re going to have and the final agreement that we’ve reached," says Bekkerman. "One possible derailment that could happen is right now the E.U. and the U.S. are in negotiations for other trade disputes, especially the steel and aluminum, and potentially the car issues.”

Bekkerman says this agreement over beef imports is a completely separate issue but …

“Trade is always interconnected, and trade negotiations are always interconnected so fingers crossed that this is it. We’ve found a solution, and we’re going to go forward with it. But there’s always uncertainty until the last signature is placed on and this thing gets done and ready to go.”

Bekkerman says it could take several years before ranchers see the full benefits of this agreement if it’s ratified.

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