Wednesday, August 27, 1997

Argentine beef beats ban -- but timing is bad

By HEATHER BOURBEAU and NANCY DUNNE
The Financial Times
WASHINGTON -- The first shipment of fresh beef from Argentina to arrive in the U.S. after a 70-year ban could have been better timed.

The cargo, due Tuesday, coincided with the arrival of Diego Guelar, ArgentinaÕs new ambassador to the U.S., and it was to be a moment of joyful celebration. Argentina has been pushing for entry into the U.S. market for years.

"If I had to choose a moment (to ship beef), this would not be the one. But people will continue to eat beef," said Jose Molina, ArgentinaÕs agricultural attache to the U.S.
The U.S. decision to allot an initial 20,000 tons quota to Argentine beef comes at a time when U.S. consumption is declining and U.S. prices for beef are low due to recent E. coli outbreaks and scares.

Earlier this month, Hudson Foods, had to recall 25 million pounds of beef after E. coli bacteria were found in Hudson beef patties. On Monday, Burger King, one of HudsonÕs largest clients, said it would find another source of meat.
Argentine officials will attempt to overcome the mood of the U.S. public. The first 700-pound shipment will be sent to the embassy in Washington to be served during promotional events.
Argentine officials stress that their beef is subject to the same standards and disease prevention methods as U.S. beef.

However, it cannot help consumer perceptions that the meat was banned from the U.S. because of foot and mouth disease, no matter how much assurance is being given that the disease has been virtually eradicated.

Since 1927 Argentina has only been allowed to ship cooked beef products to the U.S. Following bilateral GATT negotiations, the two coun tries signed a sanitary agreement, which loosened tight US restrictions.

Previously, the U.S. has a "zero-risk" sanitary evaluation policy, which the Argentina considered unrealistic. Now the U.S. policy evaluates the "minimal risk" of disease infecting beef during shipment.

The first shipment of 20,000 metric tons of fresh beef is considered symbolic. Ambassador Guelar expressed his optimism: "We have positive expectations that the initial quota will increase and that it will be a la mode to eat Argentinean beef."