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The report says that the world market for meat in 1994 was characterized by large supplies of red and white meat and a demand, which in the face of the economic recovery appears to have strengthened. Led by the Republic of Korea and to a lesser extent by Japan, East Asian markets continued to be the most buoyant with strong demand for beef and poultry meat in particular. While showing some signs of stabilization, the countries of the former Soviet Union and most Eastern and Central European countries continued to be affected by sharply reduced herds and decreased domestic demand. In North America, record meat supplies resulted in lower prices, strengthened domestic demand, restrained market access and an increased US share in world meat exports.

The adjustment of the EC meat industry to the CAP reform was illustrated by sharply reduced stocks and lower exports. In South America, high cattle inventories enabled Uruguay to take advantage of increased foreign demand. In Argentina, export growth was due mostly to lower domestic consumption. On the other hand, Brazil's meat industry struggled to keep with surging domestic demand. For Oceania, beef exports were hindered by import restraints in North America, which were only marginally offset by higher sales to East Asia.

In 1995, world production of all meats is forecast to expand further and conditions seem to be set for a relatively good year in the international meat markets. Demand for meat should strengthen in parallel with continued economic recovery. Given very low beef stocks and limited output growth in the EC, as well as foreseeable strong import demand from Brazil, international prices in the Atlantic markets should strengthen. In the Pacific Rim, beef prices are likely to be sustained by continued import demand in Asian markets. But, while the Uruguay Round should result in higher US beef imports, continued large overall meat supplies in the US market could result in a further beef price decrease. Increased production in China and the United States is expected to keep pigmeat prices under pressure.

Lower trade barriers and reduced export subsidies resulting from the Uruguay Round will benefit meat producers worldwide by expanding export opportunities and strengthening prices. In three markets alone - the European Union, Korea and the United States - the Uruguay Round will result in new export opportunities of nearly one million tons of beef by the year 2000, according to the Special Annex.

The impact of the Uruguay Round on the meat sector include:

- Tariff bindings. The majority of countries, notably in Central and South America, have bound their tariffs on meat products between 15 and 50 per cent. A number of countries, including Australia, Hong Kong, Japan, New Zealand and Singapore have bound at low or duty-free levels on poultry and sheep meat. Bound duties of above 100 per cent predominate in Western Europe.

- Increased market access opportunities. The Uruguay Round requirement of minimum market access in 1995 for agricultural products of 3 per cent of average consumption in 1986-88 and increasing to 5 per cent by the end of the implementation period will expand considerably export opportunities in major meat markets. The United States will repeal its Meat Import Law and establish a tariff quota of 656,621 tons. The EC will open 141,000 tons of current access opportunities plus another 20,000 tons under its minimum access commitments. The Republic of Korea will increase its tariff quota on beef from 123,000 tons in 1995 to 225,000 tons in the year 2000. For pigmeat, new access opportunities will be opened during the implementation period, notably in the EC (62,000 tons), Poland (24,000 tons), Thailand and the Czech Republic (10,000 tons each). For poultry meat, there will be new export opportunities in South Africa (12,000 tons), the EC (11,000 tons) and Hungary (5,000 tons).

- Reduction of export subsidies. Between 1995 and the year 2000, the volumes subsidized exports of meat will be reduced by 21 per cent, which should help strengthen world prices. For Western Europe, this would mean the reduction of subsidized beef exports from 1.1 million tons in 1995 to slightly above 800,000 tons in the year 2000.

Note to editors:

With the entry into force of the WTO at the beginning of the year, the International Bovine Meat Agreement has replaced the GATT Arrangement Regarding Bovine Meat (1980-1994). The Agreement aims to promote the expansion, liberalization and stability of the international meat and livestock market by facilitating the progressive dismantling of obstacles and restrictions to world trade in bovine meat and live animals, and by improving the international framework of world trade to the benefit of consumers, producers, importers and exporters. To this end, the Agreement provides for a comprehensive information and cooperation mechanism with respect to output, consumption and trade in bovine animals and bovine meat.

As at 31 January 1995, the Agreement has been accepted by the following: Argentina, Brazil, Canada, Chad, the European Communities and its 15 member states, Japan, New Zealand, Norway, Romania, Switzerland, the United States and Uruguay. Other countries are expected to accept the Agreement shortly.

The International Meat Council (IMC) administers the Agreement. Like its predecessor, the new IMC will meet twice a year and, supported by the Meat Market Analysis Group, will continue to evaluate the market situation and outlook based on background information provided by the WTO Secretariat. It will also review the functioning of the Agreement and will provide a forum for regular consultations on all matters affecting international trade in bovine meat. Developments in the world markets for pigmeat, poultry meat and sheepmeat will also continue to be reviewed at IMC meetings.