WASHINGTON – U.S. Trade Representative Rob Portman announced today that the
United States has reached a trade agreement with the European Union (EU)
regarding the EU's May 2004 expansion. The agreement consists of a comprehensive
package of EU trade concessions to compensate the United States for tariff
increases that the EU implemented as a result of that expansion. It also reduces
several EU tariffs and expands a number of EU tariff rate quotas and will
enhance and strengthen market access opportunities for U.S exports to the EU
market for a broad range of agriculture and several industrial goods. Negotiated
under GATT rules, the agreement is subject to approval by the EU Member States
and is expected to go into effect during 2006.
"I am pleased we have been able to negotiate a good compensation package that
expands market opportunities for U.S. exporters," said Ambassador Portman. "The
United States supports EU enlargement. There are, however, explicit rules in the
GATT regarding how trading partners must be compensated when a customs union is
formed. We have worked with U.S. industries affected by enlargement in order to
uphold our rights."
The agreement was initialed in Brussels this morning and will be signed once
the EU Member states approve the agreement. Ambassador Portman also thanked the
U.S. Department of Agriculture and the U.S. Department of Commerce for their
assistance in the negotiations.
Key elements of the deal include:
· The EU will permanently reduce tariffs on protein concentrates, fish (hake,
Alaska Pollack, surimi), chemicals (polyvinyl butyral), aluminum tube, and
molybdenuym wire.
· The EU will open country-specific tariff rate quotas for U.S. exports of
boneless ham, poultry, and corn gluten meal.
· The EU will expand existing global tariff rate quotas for beef, poultry,
pork, rice, barley, wheat, maize, sugar, fructose, preserved fruits, fruit
juices, pasta, chocolate, food preparations, petfood, live bovine animals and
sheep, and various cheeses and vegetables.
· As part of broader discussions on EU enlargement, the EU had agreed earlier
to expand the maximum quantities allowed in licensing applications for imports
into the EU of pork. This measure went into force in March 2005.
Background
On May 1, 2004, Estonia, Latvia, Lithuania, Poland, Slovakia, the Czech
Republic, Slovenia, Hungary, Cyprus and Malta acceded to the European Union. The
10 new members were required to change their tariff schedules to conform to the
EU’s common external tariff schedule, resulting in increased tariffs on certain
imported products. Under General Agreement on Tariffs and Trade 1994 (GATT 1994)
Articles XXIV: 6 and XXVIII, the United States is entitled to compensation from
the EU to offset some of these changes. The expansion of EU quotas to account
for the addition of 10 new countries and more than 75 million new EU consumers
was another key element of the negotiations.
If the U.S. and the EU had not been able to reach this agreement, the U.S.
had the right to raise tariffs on an offsetting amount of imports of products of
which the EU is the dominant supplier.
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