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The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

What’s the Beef?

Mar 07, 2013

By Hope Pjesky: Goltry, Oklahoma

On a trip to Germany a few years ago, I wandered into the meat section of a grocery store. What I saw astonished me.

The beef section in the meat case was very small and the prices were very high – the price of a very average cut of beef was similar to what we would expect to pay for a prime cut of beef in a very high end grocery store.  It appeared to me that European families had very little choice – in either quality or price – when they purchased beef for a family meal. 

Europeans have no idea what they’re missing. 

It’s just one more reason why Washington must push for a robust free-trade agreement with the European Union. If American beef exports enjoyed better access to European markets, our ranchers and processors would experience a boom of job-creating growth.

President Obama said as much in his State of the Union speech: "Trade that is free and fair across the Atlantic supports millions of good-paying American jobs." 

Yet very few are in the beef industry right now. 

It wasn’t always this way. A generation ago, Europe was America’s second-largest market for beef. Within a few years, however, our presence in the grocery stores and restaurants of London, Paris, and Rome plummeted. We went from selling 18 percent of our beef exports to Europe in 1989 to selling just 3 percent in 1994.

Consumers didn’t turn against us, but public perceptions did. Following a series of hormone scandals in the 1970’s and 1980’s, Europeans experienced a period of anti-scientific hysteria, concerned that beef produced from animals that had received growth hormones posed a risk to human health.  

So they banned it. 

The ban was not science-based and not needed: Growth hormones are a safe and conventional element of beef production.  

Growth hormones are in fact an important part of sustainable food production. They allow us to do more with less. Cattle reach their proper weight in fewer days and with less feed, allowing quality to go up and costs to go down.

In Europe, however, ignorance and politics trumped science. The ban went into force and Americans have paid an economic price ever since. 

At first, we turned to the World Trade Organization, which was established in part to adjudicate these types of disputes. The WTO ruled in our favor, observing that there’s no scientific rationale for the ban. It allowed the United States to impose retaliatory tariffs on a range of European products. This was supposed to encourage Europe to come to its senses. 

Two decades have passed, and the EU continues to resist. Its illegal ban on U.S. beef has stayed in place, and the retaliatory tariffs have caused American consumers to pay more than they should for Roquefort cheese and other imports.

We need to try a new approach--and a broad-based free-trade agreement between the United States and the EU is exactly the right forum for dealing with the problem. 

The good news is that although a pact would benefit both sides, the Europeans appear to want one desperately. That means they may be unusually willing to alter their hardline stance on beef, which their officials know to be wrongheaded. 

We’ve already seen at least one initial concession. The EU recently lifted a ban on meat washed with lactic acid, which safely removes contaminants such as E. coli from food. This was another unscientific prohibition of a common practice in the United States

These important steps suggest that larger compromises could come soon. 

In free-trade negotiations, agriculture is usually one of the trickiest sectors--and it will definitely be the toughest part of any deal with the EU. In addition to the ban on beef, we must also confront the EU’s politically (not science or health)-based resistance to biotech crops. 

There is a great price to be paid by all when countries allow non-scientific trade barriers to stay in place. Reduced investment in productivity enhancing technologies and reduced trade between countries are just the tip of the iceberg.  Unless we work together to make sure that politics and perceptions are not allowed to over-ride science, the price for global food security will also go up. 

Right now, however, anything looks possible--and anybody who lays eyes on the meat section of a European grocery store will see how much we all have to gain. 

Hope Pjesky and her family are farmers / ranchers in northern Oklahoma where they raise cattle and wheat.  Hope volunteers as a board member for Truth About Trade & Technology (www.truthabouttrade.org). Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.

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