Fears Dissipate Over Further Restrictions against Imports of US Beef

2 May 2012

The possibility of widespread measures restricting beef imports originating from the United States appears to have faded, following an initial scare over the 24 April announcement that a cow in the US state of California had tested positive for mad cow disease.

Canada, Japan, Mexico, and South Korea, the four largest purchasers of US beef, have said that they do not plan to restrict beef imports. However, South Korea and Taiwan are performing additional tests on beef imports originating from the US, and Taiwan is seeking permission to send officials to tour US slaughterhouses.

To date, the only nation that has announced trade restrictions is Indonesia, which has enacted an indefinite ban on imports of US beef. With Indonesia accounting for just 0.6 percent of the international consumption of United States beef, the measures are destined to have only a small impact on trade.

Indonesia has not said how long its ban might last. For the time being, Indonesia "will continue to monitor the situation and seek information from the US authorities," according to Agriculture Minister Suswono.

US Trade Representative (USTR) Ron Kirk responded by saying that restrictions on agricultural trade should be based only on scientific evidence. "We would expect that Indonesia would quickly re-open its market to consumers for US beef products," he added.

The mad cow condition is a neurodegenerative disease in cattle scientifically known as bovine spongiform encephalopathy (BSE), which can be transmitted to humans who eat parts of an infected cow.

Health officials in the US have said that the recent mad cow incident poses no risk to the food supply, given that the cow in question was never intended to be used for its meat. Also, scientists have discovered that the cow contracted the virus through a rare mutation, not through the type of feed contamination that has caused larger incidents in the past.

Despite the confined nature of the incident, the international beef trade remains fragile. Three earlier cases of mad cow disease in the US between 2003 to 2006 unleashed harsh international restrictions against US beef that have not been entirely removed.

For instance, Japan banned the import of US cattle products in 2003, a decision that has never been fully reversed. While Japan later decided to allow imports of cattle aged 20 months or younger - given that research showed older animals to be more likely to contract the illness - the Asian country still only imports around half as much US beef as it did during its peak back in 2001.

In recent months, Japan has considered allowing meat from cows slaughtered at more than 20 months of age to enter the country - a move that would greatly increase imports. According to Susumu Harada of the US Meat Export Federation, "there is still about 45 percent room for growth."

However, analysts note that any further mad cow incidents could push in the opposite direction, spurring additional import restrictions. Indonesia's decision "is a reminder that there's a risk of more import bans to come if the situation in the US worsens," Carsten Fritsch of Commerzbank AG commented to Bloomberg.

ICTSD reporting; "Holstein with Mad Cow Disease was Lame, Lying Down," ASSOCIATED PRESS, 27 April 2012; "Cattle Extend Rally as Mad Cow Fails to Slow Demand," BLOOMBERG, 26 April 2012; "Mad Cow: Latest Episode Raises Questions About Cattle Feed," CHRISTIAN SCIENCE MONITOR, 28 April 2012; "Indonesia Should Quickly Reopen Market to U.S. Beef: Trade Representative Kirk," REUTERS, 26 April, 2012; "New Mad Cow Case Threat to U.S. Beef Exports to Japan?," WALL STREET JOURNAL, 25 April 2012.

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