Front Page	E-mail PagePrint Version

Tariff cuts will compensate US for increases tied to EU's 2004 enlargement

GENEVA, Switzerland - 03/24/06 - The US and the European Union (EU) have signed a bilateral trade agreement on a comprehensive package of EU trade concessions to compensate the US for tariff increases that resulted from the EU's May 2004 enlargement.

The agreement was reached in November 2005 but required approval by the EU member states. 

It was signed earlier this week in Geneva by Peter Allgeier, US Ambassador to the World Trade Organization (WTO), and European Commission Ambassador to the WTO Carlo Trojan.

The agreement reduces several EU agricultural and industrial tariffs to offset increases that occurred when the 10 countries that acceded to the EU in 2004 were required to change their tariff schedules to conform to the EU's common external tariff schedule.

Under the General Agreement on Tariffs and Trade (GATT), the US is entitled to compensation from the EU to offset some of those changes.

The deal calls for the EU to open new country-specific tariff-rate quotas for US exports of boneless ham, poultry, and corn gluten meal; and expand existing global tariff-rate quotas for food preparations, fructose, pork, rice, barley, wheat, maize, preserved fruits, fruit juices, pasta, chocolate, pet food, beef, poultry, live bovine animals and sheep, and various cheeses and vegetables.

In addition, the EU will permanently reduce tariffs on protein concentrates, certain fish, chemicals (polyvinyl butyral), aluminum tube, and molybdenuym wire; and the US 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.

Another element of the agreement - the expansion of tariff-rate quotas - enhances and strengthens market-access opportunities for certain U.S exports to the EU market, according to a press release from the Office of the US Trade Representative (USTR).
 
Implementation of the EU concessions is to go into effect no later than July 1.

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 US negotiated with the EU 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.

The new agreement "upholds our rights under WTO [World Trade Organization] rules.  We worked closely with US industries affected by the enlargement of the EU to secure the appropriate compensation," said USTR Rob Portman.

Go back, or read the latest Front Page stories:

Korea, US Free Trade Pact ''Possible'' by Early 2007

WASHINGTON, DC – 10/25/06 – A free trade pact between the US and South Korea could become a reality by early 2007, says chief US negotiator Wendy Cutler at the opening of this week’s fourth round of talks between the two countries; since the two sides launched FTA negotiations in February they have reported little progress even though they postponed consideration of the most politically sensitive issues, such as US access to the Korean rice market.