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AMI Says EU Inflexibility On Veterinary Equivalance May Require Reciprocal Action

Thursday, May 15, 1997

The U.S. and some European Union (EU) member state meat inspection systems are equivalent and among the best in the world, according to AMI Vice President of International Trade Leonard Condon. The recent agreement reached between the U.S. and EU fell short in several key areas as a result of the EU's need to protect its livestock producers, not because of legitimate concerns about meat safety.

Condon made his remarks today in testimony before the Senate Finance Committee's International Trade Subcommittee. Condon noted that the agreement still does not provide U.S. exporters the same flexibility that the U.S. provides EU meat exporters. More than 150 EU beef and pork slaughter plants are eligible to export to the U.S., while only eight U.S. slaughter plants are certified to ship to the EU, even though there are only narrow differences between U.S. and EU inspection standards.

Failure to reach agreement on poultry equivalence, which has halted poultry shipments to the EU, was especially disappointing, Condon said.

"We find it incomprehensible that processing techniques widely used in the United States and required by export customers throughout the world to ensure the production of safe and wholesome poultry are incompatible with current EU standards," Condon said. The agreement does require a scientific study of various poultry processing techniques -- a study that Condon called "critical."

Condon said that EU agriculture subsidies and a growing beef surplus limited the EU's negotiating flexibility. If the EU does not offer more flexibility in its standards, the U.S. should consider reciprocal stringency in its requirements for EU meat exporters, he said.

Condon listed a number of internal imperatives, including a generous price support system which encourage over-production, coupled with substantial export subsidies as a key reason for the lack of U.S. access to the European market and continued EU intransigence in veterinary equivalence. Condon characterized the internal imperatives as making prospects for increased U.S. meat and poultry exports to the EU "not bright."

Condon cited the "producer subsidy equivalent," a yardstick for measuring the size of farm subsidies as evidence that the EU will have difficulty in justifying increased U.S. access to the EU market. Calculated by the Organization for Economic Cooperation and Development (OECD), the producer subsidy equivalent for European beef and veal amounts to 64 cents on the dollar in direct subsidies to EU producers, against only five cents for U.S. beef producers.

Similarly, the OECD calculates the EU subsidy for poultry to be 28 cents, versus less than five cents in the U.S. EU subsidies for hogs amount to nine cents with U.S. subsidies amounting to only five cents.

Condon also noted that EU beef stockpiles are at record levels due to concerns in Europe over the safety of European beef. These stockpiles, according to Condon, have negative price implications for all EU livestock and poultry producers and disposing of the stockpiles poses a formidable challenge for the EU and one that would be exacerbated by increased U.S. exports to the EU.

AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Headquartered in Washington, DC, the Institute provides legislative, regulatory and public relations services, conducts scientific and economic research, offers marketing and technical assistance and sponsors education programs.

For more information contact:
Janet Riley
Vice President, Public Affairs
James Ratchford
Manager, Public Affairs

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