RESTRICTED
WORLD TRADE IMA/5
27November 1996
ORGANIZATION(96-5008)
International Bovine Meat Agreement
INTERNATIONAL MEAT COUNCIL
Report
1. TheInternational Meat Council helditssecond meeting on11June1996. Intheabsence of
theChairman, Ms.BridCannon ofIreland waselected asInterim Chairperson forthismeeting. The
agenda contained intheconvening airgram WTO/AIR/343 wasadopted andMr.Arthur Nogueira of
Brazil wasre-elected asChairman oftheInternational Meat Council foranother one-year term.
Evaluation oftheMeat Market Situation andOutlook
2. TheCouncil tooknoteofthefollowing documents which wereprepared bytheSecretariat for
thepurpose ofassisting theCouncil 'sdiscussion under thisagenda item: "Situation andOutlook in
theInternational Meat Markets" (IMA/W/7 andCorr.1), "Summary Tables" (IMA/W/8) and"Bovine
Meat Statistics" (IMA/W/9).
(a) Bovine meatproduction
3. IntheUnited States, beefproduction isexpected toreach record levels in1996 asthecattle
cycleisapproaching theliquidation phase. Thepaceofcattle liquidation in1996iscontingent onfurther
grain price movements andforage supplies. InCanada, theexpansionary phase inthecurrent cattle
cycleisexpectedtoendinmid-1996andthesubsequentliquidationisforecasttoincreasebeefproduction
atleastthrough 1997. InArgentina, beefproduction wasstable inrecent years andisnotexpected
toincrease in1996. InApril 1996, Argentina hadcompleted twoyears without anyoutbreak offoot-and-
mouth disease (FMD) which wasachieved through apolicy ofcontrol anderadication, including
vaccination, strict controls ofcattle movements andrigorous emergency measures. Argentina isnow
intheprocess ofseeking recognition ofitsFMD-free status bytheInternational Office ofEpizootics
(OIE). Shipments totheUnited States under Argentina 's20,000 tontariffquota allocation negotiated
intheUruguay Round aretocommence oncetheUnited States 'newregulation regarding regionalization
hasbeenpromulgated. Thegeneral trend inUruguay 'sbeefsector isexpansionary. InNewZealand,
theexpansion ofthecattle herdisexpected toendinresponse tosharply lower producer returns.
Production isexpected toremain stable in1996/97 butforecast todropin1997/98. South Africa 's
cattle cycle isintheexpansionary phase, withthepeakexpected for1997/98. Aslight increase in
production isexpected for1996.
4. IntheEuropean Communities, thecattle cyclehasentered therebuilding phase. Cattle numbers
remained stable in1995butproduction increased slightly, mainly asaresult ofheavier average carcasses
duetoahigher proportion ofbeefraces (suckler cows). Therecent cyclical increase inslaughtering
prior totheoutbreak ofthe"BSE crisis" inMarch 1996 hasbeenmore modest thaninthepastand
itisexpected thatproduction willdecline slightly inthelongterm. InNorway, production isexpected
toincrease, largely asaresult ofashiftfrom dairy tobeefproduction. InBulgaria, cattle numbers
andbovine meatproduction continued todecline in1995whereas inHungary procurement dataindicateIMA/5
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thatarecovery ofthelivestock sector isunder way. InRomania, there aresigns thatproduction and
consumption havestabilized, albeit atalowlevel.
(b) Bovine meatconsumption
5. InArgentina,beefconsumptionisexpectedtorecoverin1996followingseveralyearsofdecline.
InNewZealand, beefconsumption increased substantially in1994/95 inresponse tolower realbeef
prices, higher incomes, increased useofbeefaspetfoodandpossibly adietary shifttoward redmeats.
InJapan, consumption isconsidered tobeataturning point. While consumers tended toprefer lower-
price grassfed beeffollowing theliberalization ofJapan'simport regime, theyareswitching towards
high-quality grainfed beef. IntheEuropean Communities, consumption inseveral ofitsmember States
increased in1995. However, aggregate bovine meatconsumption intheCommunities declined slightly.
InNorway, there wasasteady increase inbeefconsumption inrecent years andthistrend, which is
considered tobetheresult ofdecreasing prices andchanging eating patterns, isexpected tocontinue
thisyear. InSwitzerland, consumption ofbeefdecreased in1995while vealconsumption increased.
Following theoutbreak ofthe"BSE crisis", beefconsumption inSwitzerland initially dropped sharply
butsubsequently recovered inresponse tolower retail prices.
(c) Bovine meattrade
6. Beefexports bytheUnited States areexpected toincrease thisyearastheresult oflargedomestic
supplies andgrowing demand fromJapan andKorea. USimports areforecast todecline further, given
abundant supplies ofdomestic beefforprocessing andrelatively depressed prices. Thetrend ofrising
livecattle exports from Canada totheUnited States isexpected toturninthecourse of1996 asthe
resultofsubstantiallyincreasedslaughtercapacityinWesternCanada.Argentinaisexpectingarelatively
sharp dropinexport volumes thisyear, partly astheresult ofdecreased redmeatconsumption inthe
European Communities inthewake ofthe"BSE crisis". Exports bytheEuropean Communities are
expected todecrease thisyear. Theimpact ofthe"BSE crisis" onNewZealand 'sbeefexports is,
sofar,expected tobemodest, given thatNewZealand 'smain export destinations differ from those
traditionally supplied bytheEuropean Communities. Thegrowth ofJapan'sbeefimports isexpected
tobelower thisyearthanin1995.
(d) Other meats
7. IntheUnited States, pigmeat producers enjoy favourable pigprices butarealsofaced with
highfeedgrain prices. Onbalance, production isexpected tobehigher inthesecond halfof1996
compared tothesecond halfof1995. USpoultry meat production isexpected toincrease in1996
despite substantially increased feedcosts. InCanada, too,thepigmeat sector benefits fromfavourable
producer prices andproduction isthusforecast toincrease in1996. Poultry meatproduction isalso
increasing inCanada. IntheEuropean Communities, prices forpigmeat, poultry meatandsheepmeat
havesharply increased inthewake ofthe"BSE crisis", compensating fortheincrease infeedgrain
prices. ECpigmeat andsheepmeat production areforecast todecline in1996 whereas poultry meat
production isexpected toincrease slightly.
Functioning oftheAgreement
8. TheCouncil resumed thegeneral discussion regarding thefunctioning oftheAgreement which
ithadinitiated atlastyear'sJunemeeting (IMA/4, refers). TheUnited States stated that,given resource
constraints, itwasseeking tofurther reduce thework oftheCouncil andtheSecretariat 'scontribution
thereto. TheWTO priorities oftheUnited States intheareaofagriculture were theCommittee on
Agriculture andtheCommittee onSanitary andPhytosanitary Measures aswellasadequate servicing
ofthedispute settlement mechanism bytheSecretariat. TheUnited States alsoconsidered thattheIMA/5
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information provided totheInternational Meat Council could beobtained from other sources. The
United States therefore proposed thattheChairman convene informal consultations withaview to
considering: (i)toreduce thenumber ofstatistical submissions from currently twotooneperyear;
(ii)tolimit theSecretariat 'scontribution tothestatistical Summary Tables andthereby relieve the
Secretariat oftheobligation todraw upthemeatmarket situation andoutlook report; and(iii)the
future oftheAgreement, inparticular theissue ofwhether there wassufficient interest incontinuing
theAgreement. Anumber ofdelegations endorsed theproposal bytheUnited States butnoted that
theywould prefer toconsider thequestion ofthefuture oftheAgreement before addressing theother
twoproposals. TheEuropean Communities cautioned withrespect tofurther "emptying" theAgreement
ofitssubstantive provisions andexpressed reservations withregard tothesuggestion thatother fora
could substitute forthework oftheCouncil. Therepresentative ofSwitzerland noted thatforasmall
country theinformation provided bytheCouncil continued tobeavaluable source ofinformation.
TheCouncil agreed thattheChairman engage informal consultations regarding theproposals.
Report totheSingapore Ministerial Conference
9. TheCounciltooknotethatatthemeetingoftheGeneralCouncilon16April1996,theChairman
hadrequestedsubsidiarybodiesoftheGeneralCounciltosubmittheirrespectivereportstotheSingapore
Ministerial Conference inaccordance with theschedule ofmeetings circulated indocument
WT/GC/32/Rev.1 andhadinvited theChairpersons ofthesubsidiary bodies tomake anynecessary
arrangements. Onthebasisofthisunderstanding intheGeneral Council, Mr.Nogueira, asChairman,
hadsubmitted adraftreport circulated asdocument IMA/W/10. TheCouncil adopted thedraftreport
forthepurpose oftheSingapore Ministerial Conference, asamended.
Dateofthenextmeeting
10. TheCouncil tooknotethatthedateofthenextmeeting would befixed atalaterstage bythe
Chairman inconsultation withParties.