Saudi Arabia’s suspension of U.S. beef imports has now lingered for nearly a year and a half, and continues to have a significant impact on the bottom line of U.S exporters who served this market. The suspension came about one month after an atypical BSE case was detected in California in April 2012. The case had no impact on the United States’ BSE risk classification, which was controlled risk at that time but has since been upgraded to negligible risk. Few trading partners reacted negatively to the case, but Saudi Arabia has been the notable exception.
The impasse has prevented Saudi consumers from obtaining a product they clearly want. In 2011, Saudi Arabia was the 17th-largest destination for U.S. beef in volume (6,640 mt) and 14th-largest in value ($31.8 million). Through April 2012, prior to the suspension, exports increased nearly 20 percent in value over the 2011 pace.
Because Saudi Arabia represented a fairly small percentage of our total beef exports (in 2011, 0.5 percent in volume and 0.6 percent in value), closure of this market has attracted far less media attention than some other beef trade disputes. But these industry-wide percentages greatly understate the harsh impact this impasse has had on several small and middle-sized U.S. companies that cultivated a significant customer base in Saudi Arabia and are now forced to watch from the sidelines as these customers turn to other suppliers.
The Saudi government has presented USDA and USTR with a list of conditions for restoring beef access, many of which are unacceptable to the U.S. government and the beef industry. The Saudi offer, however, represents a starting point for negotiating a protocol that will permit U.S. beef back into this important high-value market. USMEF understands that USDA has engaged the Saudi Arabian Food and Drug Administration on the specific elements of the Saudi offer and that the two governments will now launch the kind of sustained dialogue necessary to arrive at an agreement on reopening the market.