The door is opening a little wider for Canadian beef exports to the European Union.
Canada has joined the United States and Australia in qualifying for the EU's 20,000 tonne annual duty-free import quota for beef raised without growth hormones.
The quota was established in the spring of 2009 following compensation negotiations between the U.S. and EU. It was a settlement reached after a World Trade Organization Dispute Panel ruled the EU ban on growth promotants was not scientifically justified. Since the quota operates under the WTO, it needs to be open to all countries that meet the specification. A number of other countries are also trying to demonstrate that they have reached the EU standards.
"The EU has finally acknowledged that Canada meets the specification required for the quota because cattle have to be fed a certain ration and (are) grading out at a certain quality level," says John Masswohl, the director of government and international relations with the Canadian Cattlemen's Association.
A number of Canadian cattle producers raise their animals without growth hormones, but have relied on relatively small domestic or U.S. niche markets for any premiums.
"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," says CCA president Travis Toews. "Finally, we can start to scratch the potential of this market."
The Canada Beef Export Federation estimates the new duty-free access could be worth more than $10 million per year. The EU duty-free quota is expected to increase to 45,000 tonnes in 2012.
Meanwhile, Canada should have access to another 3,200 tonnes of duty-free quota based on a just-finalized memorandum of understanding with the European Commission. It would serve as compensation for the continued EU ban on beef raised with growth hormones.
This is good news for the Canadian cattle sector, but the big prize remains the ongoing free trade negotiations with the European Union.
"We have very clearly planted the idea in the minds of the Canadian and the European negotiators that there has to be some very substantial access for Canadian beef," Masswohl says. "We'll have to see what gets negotiated at the end of it, but we are certainly firm on our line that we need to have unlimited, duty-free access to the European Union."
Canadian and European negotiators held a fifth round of discussions last month in Ottawa.