European Union

The European Union (EU) and the United States (US) have been in a trade dispute since 1997 regarding equivalency of poultry slaughterhouse inspection systems. Initially, the EU banned poultry imports from the US because the EU mandated high standards of cleanliness at all stages of production in their sytem, while the US approves the use of chlorinated water as a decontaminate at the end of the production process. In light of the disagreement, the US and EU entered into negotiations seeking a Veterinary Equivalence Agreement. When no agreement was reached by April 30, 1997, the US retaliated with a counter ban on all poultry imports from EU. The EU then appealed to the World Trade Organization on August 18, 1997. The EU argued that the US ban is a violation of the Sanitary/ Phytosanitary Agreement of GATT.

As a result of EU requirements, the poultry ban has resulted in an estimated loss of $50 million annually to U.S. poultry exporters. The US ban on EU poultry is estimated to have halted $1 million worth of poultry imports. A much broader trade war was averted including other meat items with the Meat Equivalency Agreement of April 30, 1997. The frame work agreed to in April, 1997 allowed the signing of the Veterinary Equivalency Agreement on July 20, 1999 between the EU and the US.

The agreement covered more than $1.5 billion in US animal and animal product exports to the EU and an equal value of EU exports to the US. Specifically, Commission Decision 2003/863/EC established model health certificates for the importation of gelatin and collagen from the US. The concept of the equivalency agreement also allowed veterinary inspection requirements to differ between the US and EU, but ensured the US’s right to establish its own level of public health protection.

The EU also committed in the 1997 agreement to undertake a scientific study on the use of anti-microbial treatments. The results of this study were released on October 30, 1998. The report recommended that anti-microbial treatment should only be used as part of an overall strategy for pathogen control throughout the whole production chain. Although chlorine was rejected as an anti-microbial treatment, TSP and lactic acid were deemed more acceptable.

The European Food Safety Authority (EFSA) has completed its risk analysis of three different antimicrobial products for use in processing poultry. The EFSA has agreed with the United States Department of Agriculture’s (USDA) findings that the use of the three antimicrobials would pose no food-safety hazard to consumers. A committee vote is expected sometime early in the summer of 2005. If the governing committee approves the products and resulting new rules, some think the new rules could take effect in early 2006. The new rules would again allow US poultry into the EU market and possibly allow EU poultry into the US when the retaliatory measures are lifted.

However, Finland and Sweden are in opposition to the new rules since they believe anti microbial treatment is not necessary for poultry. In a compromise, the EFSA is also proposing that packaged treated meat that has not been marinated, minced, or otherwise handled should bear a special label that it has been treated. Some EU countries would like to impose mandatory labeling on treated meat. It is unclear how many EU counties will start treating poultry once the new rules are passed, however, it is noted that salmonella is bigger problem outside of the Nordic region.

In 2005, EU broiler meat production is expected to grow by less than 1 percent to just under 8 million tons. Improved feed costs following droughts in 2003 and recovery from avian influenza are factors in the broiler meat production growth. Production growth is expected in Belgium/Luxemburg, Poland and Spain. Additionally in 2005, the decoupling of subsidy payments for cereal grains will likely increase the profitability of Hungarian and Polish broiler meat producers due to the availability of low-cost feed grains.

The EU exports mostly low value cuts as well as mechanically deboned meat (MDM). Even though Polish MDM exports to mainly Russia experienced a 13 percent increase, EU exports in 2005 exports are expected to increase by less than 1 percent driven by the modest increase in production and also in part by stiff international competition and unfavorable exchange rates. The increase in Poland’s MDM exports came despite delays in the implementation of EU’s Russian import allocation. The EU has also faced strong competition from Brazil into Saudi Arabia and the United Arab emirates, which are also two of the EU’s main export markets.

As of January 1, 2005, animal health certification is required for all products that transit the EU immediately or transit after storage in the EU. The shipments do not need public health statements required for products destined to the EU consumer. Animal health certification is needed for product intended to go to EU free zones, free warehouse and premises of operators supplying cross border means of sea transportation and EU customs warehouses. Recently 10 new members joined the EU. These members are Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Bulgaria and Romania have not yet concluded their accession negotiations. They are expected to join the EU in 2007.
Source: USDA/FAS and various other news sources