U.S. Terminates All 100% Duties in EU Beef Hormone Dispute

CAFC Ruled that 100% Beef Hormone Duties Ended on July 29, 2007

In October 2010, the Court of Appeals for the Federal Circuit confirmed a lower court ruling that imposition of the 100% retaliatory duties in the beef hormone case terminated by operation of law on July 29, 2007, as U.S. industry failed to file request for continuation of the duties as required by statute.

Terminating 100% Duties as a Result of CAFC Ruling

As a result of the court’s decision, USTR has decided to terminate the 100% duties imposed in connection with the EC Beef Hormones dispute, as follows:

Retroactive to July 29, 2007

The 100% ad valorem duty rates for the below-listed Chapter 99 numbers is terminated according to the following dates and liquidation status:

a) products that are entered, or withdrawn from warehouse, for consumption on or after May 27, 2011,

b) unliquidated entries made prior to May 27, 2011 that were entered, or withdrawn from warehouse, for consumption after July 29, 2007, and

c) products that were entered, or withdrawn from warehouse, for consumption after July 29, 2007, where the liquidation of the entry is not final.

Articles the product of Austria, Belgium, Denmark, Finland, France, the Federal Republic of Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, or Sweden:

Articles the product of France:

Retroactive to March 23, 2009

The 100% ad valorem duty rates for the below-listed Chapter 99 number is terminated according to the following dates and liquidation status:

a) products that are entered, or withdrawn from warehouse, for consumption on or after May 27, 2011,

b) unliquidated entries made prior to May 27, 2011 that were entered, or withdrawn from warehouse, for consumption on or after March 23, 2009, and

c) products that were entered, or withdrawn from warehouse, for consumption on or after March 23, 2009, where the liquidation of the entry is not final.

Articles the product of Austria or France:

FTZ Privileged Foreign Status No Longer Needed

USTR adds that as of May 27, 2011, products in the following HTS subheadings (that were subject to the 100% duty rate prior to this announcement) that are entered into a Foreign Trade Zone must no longer be admitted in “privileged foreign status,” as defined in 19 CFR 146.41:

9903.02.21, 9903.02.22, 9903.02.23, 9903.02.24, 9903.02.25, 9903.02.26, 9903.02.27, 9903.02.28, 9903.02.29, 9903.02.30, 9903.02.32, 9903.02.34, 9903.02.43, 9903.02.44, 9903.02.45, 9903.02.46 and 9903.02.83.

Prior Deleted Items -- After July 29, 2007 and Before March 23, 2009

USTR is also terminating the 100% ad valorem duty rate for the following Chapter 99 numbers that were removed from the 100% duty list effective March 23, 2009: 9903.02.31, 9903.02.33, 9903.02.35, 9903.02.36, 9903.02.37, 9903.02.38, 9903.02.39, 9903.02.40, 9903.02.41, 9903.02.42, and 9903.02.47. For these HTS numbers, the 100% duty rates are terminated with respect to:

a) unliquidated entries made after July 29, 2007 and before March 23, 2009, and

b) products that were entered, or withdrawn from warehouse, for consumption after July 29, 2007 and before March 23, 2009 where the liquidation of the entry is not final.

All Affected Subheadings Being Deleted from HTS Effective May 27

In addition, USTR states that all of the above-listed subheadings, along with any associated superior headings or subheadings, are being deleted from the HTS, effective May 27, 2011. (Note that even though certain HTS numbers were deleted from the 100% duty list effective March 23, 2009, the numbers remained in the HTS.)

100% Duties Had Been Set to Expire in Aug 2012 Under MOU

In May 2009, the U.S. and the EU announced the signing of a Memorandum of Understanding (MOU) in the EC-Beef Hormones dispute. The MOU provided for the EU to make phased increases in market access by adopting a tariff-rate quota (TRQ) for certain beef products, in return for the U.S. making phased reductions in the retaliatory duties. The MOU had three phases, the first of which was completed in September 2009 when the EU opened up a TRQ and USTR terminated its pending expansion of the additional duties to more products. The agreement was to have moved into a second phase in August 2012 when the EU would increase the TRQ, and the U.S. would lift all remaining additional duties.

(See ITT’s Online Archives or 05/14/09, 08/13/09, and 09/22/09 news, 09051405, 09081310 and 09092205 for BP summaries of the U.S. and EU signing the MOU and the initiation and fulfillment of the first phase of the agreement.)

U.S. to Continue to Monitor EU Implementation of MOU, Could Act Further

USTR states that until the entry into force of the possible second phase of the MOU in August 2012, the U.S. retains the right under the MOU to impose Chapter 99 duties on the agreed reduced list of products that were subject to 100% duties after March 23, 2009.

The U.S. also continues to have an authorization from the WTO DSB to suspend concessions on EU products in the amount of $116.8 million per year. At this time, however, the MOU is operating successfully by providing increased market access to U.S. beef producers. In light of the currently successful implementation of the MOU, the fact that all 100% duties would have to be removed in August 2012 under a possible second phase of the MOU, and to encourage continued cooperation under the MOU, the Trade Representative has determined not to take steps at this time to exercise U.S. rights to impose duties on EU products in connection with the EU beef hormones dispute.

The Trade Representative will continue to monitor EU implementation of the MOU and other developments affecting market access for U.S. beef products. If implementation of the MOU and other developments do not proceed as contemplated, the Trade Representative will proceed to consider additional actions under Section 301 of the Trade Act.

(See ITT’s Online Archives or 01/20/09, 03/13/09, 03/18/09, 04/20/09, 04/23/09 news, 09012005, 09031305, 09031810, 09042015, 09042310, for BP summaries of USTR announcing then delaying certain modifications to the list of products subject to 100% duties. Some of the modifications, such as the above-mentioned deletions, went into effect March 23, 2009; others were delayed as the U.S. and EU pursued agreement under the MOU.)

(FR Pub 05/27/11)