US, EU sign deal ending beef dispute
Friday, 15 May 2009
WASHINGTON, May 14 (AFP): The United States and Europe have inked a provisional deal to end a longstanding dispute over the EU's ban on American hormone-treated beef, officials said yesterday.
Under the memorandum of understanding, the EU will provide access at zero duty of up to 45,000 tons of US beef produced from cattle not treated with growth-promoting hormones, they said.
Washington, on its part, will shelve plans to slap new import duties on EU products ranging from Roquefort French cheese to Italian mineral water under the agreement signed in Geneva.
Some 11,500 tons of US beef are allowed into the EU at present and they are are subject to a 20 per cent duty.
The agreement still does not end the primary dispute over hormone beef.
"The EU remains one of the few markets to ban beef from cattle given growth-promoting hormones-beef that is perfectly safe to eat-but we see this agreement as a pragmatic way forward," US Trade Representative Ron Kirk said.
"This agreement also shows what we can accomplish when we adopt a practical, problem-solving approach to trade barriers," he said in a statement providing details of a three-phase plan for the parties to bury the hatchet.
The EU import quota would be set at 20,000 tons in each of the first three years under the first phase implementation of the agreement, in which the United States may maintain import duties currently applied to certain EU products but will not impose new duties announced in January.
The new duties on French Roquefort cheese were due to have been tripled, which has grated on nerves in France.
Derivatives are aimed at reducing risk in the system by offering guarantees against price fluctuations or defaults, but the turmoil over the past year highlighted that "massive risks in derivatives markets have gone undetected by both regulators and market participants."
The new rules aim "to bring greater transparency and needed regulation to these markets."
The Treasury said it would work with authorities in other countries "to promote the implementation of similar measures around the world."
The initiative calls for securities laws to be amended requiring clearing of certain derivatives now sold outside financial markets through regulated counterparties.
These sellers would have "robust margin requirements and other necessary risk controls."
Some derivatives would still be allowed to be sold "over the counter" outside a regulated exchange, but the sellers would face "conservative capital requirements" and be required to report financial data to authorities.
The move aims to avoid the kind of catastrophe that occurred at AIG, which faced tens of billions of dollars in payouts when the subprime mortgage market collapsed, wiping out the value of mortgage-related securities it had insured.
Under the memorandum of understanding, the EU will provide access at zero duty of up to 45,000 tons of US beef produced from cattle not treated with growth-promoting hormones, they said.
Washington, on its part, will shelve plans to slap new import duties on EU products ranging from Roquefort French cheese to Italian mineral water under the agreement signed in Geneva.
Some 11,500 tons of US beef are allowed into the EU at present and they are are subject to a 20 per cent duty.
The agreement still does not end the primary dispute over hormone beef.
"The EU remains one of the few markets to ban beef from cattle given growth-promoting hormones-beef that is perfectly safe to eat-but we see this agreement as a pragmatic way forward," US Trade Representative Ron Kirk said.
"This agreement also shows what we can accomplish when we adopt a practical, problem-solving approach to trade barriers," he said in a statement providing details of a three-phase plan for the parties to bury the hatchet.
The EU import quota would be set at 20,000 tons in each of the first three years under the first phase implementation of the agreement, in which the United States may maintain import duties currently applied to certain EU products but will not impose new duties announced in January.
The new duties on French Roquefort cheese were due to have been tripled, which has grated on nerves in France.
Derivatives are aimed at reducing risk in the system by offering guarantees against price fluctuations or defaults, but the turmoil over the past year highlighted that "massive risks in derivatives markets have gone undetected by both regulators and market participants."
The new rules aim "to bring greater transparency and needed regulation to these markets."
The Treasury said it would work with authorities in other countries "to promote the implementation of similar measures around the world."
The initiative calls for securities laws to be amended requiring clearing of certain derivatives now sold outside financial markets through regulated counterparties.
These sellers would have "robust margin requirements and other necessary risk controls."
Some derivatives would still be allowed to be sold "over the counter" outside a regulated exchange, but the sellers would face "conservative capital requirements" and be required to report financial data to authorities.
The move aims to avoid the kind of catastrophe that occurred at AIG, which faced tens of billions of dollars in payouts when the subprime mortgage market collapsed, wiping out the value of mortgage-related securities it had insured.