USTR - United States and European Union Sign Enlargement Compensation Agreement
Office of the United States Trade Representative

 

United States and European Union Sign Enlargement Compensation Agreement
03/22/2006


Geneva -
United States and the European Union (EU) signed a bilateral trade agreement today relating to the EU's expansion in May 2004 from 15 to 25 members.  

The agreement reduces several agricultural and industrial tariffs to offset tariff increases that the EU implemented as a result of EU enlargement.  It also gives the United States access to expanded tariff-rate quotas for a broad range of agricultural products.  The EU concessions will go into effect once they are published in the EU’s Official Journal.  Under the agreement, implementation of these concessions is to go into effect no later than July 1, 2006.

“This is a good package that helps to enhance U.S. access to the EU’s agriculture market for pork, corn gluten meal, processed products, and to key growth markets for our exports to the EU, such as fish." said US Trade Representative Rob Portman. "The agreement upholds our rights under WTO rules.  We worked closely with U.S. industries affected by the enlargement of the EU to secure the appropriate compensation.”

The agreement was signed in Geneva by Ambassador Peter Allgeier, U.S. Permanent Representative to the World Trade Organization, and Ambassador Carlo Trojan, EC Permanent Representative to the World Trade Organization. 

Key elements of the deal include:

  • The EU will open new 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 food preparations, fructose, pork, rice, barley, wheat, maize, preserved fruits, fruit juices, pasta, chocolate, petfood, beef, poultry, live bovine animals and sheep, and various cheeses and vegetables.
  • The EU will permanently reduce tariffs on protein concentrates, fish (hake, Alaska Pollack, surimi), chemicals (polyvinyl butyral), aluminum tube, and molybdenuym wire.
  • The United States will also benefit from the Most-Favored Nation concessions that third countries such as China, Japan, Brazil, Canada, and Australia are negotiating with the EU. 

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. The United States negotiated with the EU, under General Agreement on Tariffs and Trade 1994 (GATT 1994) Articles XXIV: 6 and XXVIII, for changes to offset certain of the tariff increases. 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.


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