‘Hostage taking’ of EU cheeses

The European Dairy Association has released its opinions surrounding the recent World Trade Organisation’s ruling on retaliatory US tariffs on certain European cheeses in the Airbus versus Boeing dispute.

It notes, “We are in the dairy business and hence less acquainted with the Airbus versus Boeing case, but for this airplane state aid battle, a solution must be found within the aircraft sector. For all we see, WTO pointed out the illegality of US state aid for Boeing as of EU aid for Airbus – as it did before on Canadian state aid for Bombardier. So, indeed, there seems to be something going wrong in the aircraft sector.”

“I cannot see any reason to make basically the US cheese aficionados pay for the aircraft battle, since they would have to pay higher prices for the dairy products from the EU member states involved in the Airbus project (France, Germany, Spain and the UK),” explains EDA secretary general Alexander Anton. “When talking about ‘retaliatory tariffs’, we underline that in considering what measures to take, the complaining party shall first seek to suspend concessions with respect to the same sector (see article 22.3(a) of the WTO DSU), which is also the essence of the word retaliation (‘talis-qualis’) – we cannot see why dairy and cheese would be part of this discussion,” he stated back in April.

“Agri-food products and hence the farming community is now regularly taken as hostage in trade disputes – this is a development that is inacceptable. It not only puts additional pressure on the agri-food businesses all over the world, in the US as much as in the Union, but also on food prices,” he warns.

The EDA further notes, “The US is by far the most important agri-food importers to the European Union as the US is the most important EU agri-food export destination. Our transatlantic agri-food trade relationship shows for both sides, continuous growth. Less than 5% of the EU agri-food export value to the US is generated by dairy.

“Under the current tariff lines, for EU cheese alone in 2018, US import tariffs were at a volume of around US$100 million (€89.7m). With 133,000 metric tons, EU cheese exports to the US make up less than 2.3% of US domestic cheese production.

The European cheeses enjoyed by US consumers are mainly ‘typical’ European cheeses with unique characteristics – additional and/or retaliatory tariffs would only increase the price of these cheeses for consumers.

“For the Airbus case (DS316) the so-called retaliation list drafted by the US includes basically all cheese categories (CN 0406) and butter (CN0405), but also other dairy products. Especially the tariffs for cheese (CN 0406) have been originally agreed between the Union and the US in the GATT negotiations as an integral part of a wider agreement, which now seems to be jeopardised by US action. We also question the legality of the differentiation between EU member states in the US retaliation tariff list.”

The European Union and the European lactosphère must be treated as a single unity in WTO terms. “We are in contact with the US authorities on that very issue. And we know that the services of the European Commission do their utmost to defend European dairy and to de-escalate this conflict,” Anton concludes.

 

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