990388 U.S. Raises Stakes In Beef Hormone Dispute With EU

Washington - The United States targeted more than $900 million of European Union farm goods and other products for possible retaliation on Monday, raising the stakes in a 10-year-old dispute over hormone-treated beef.

Special U.S. trade negotiator for agriculture Peter Scher said the United States has the right to retaliate under World Trade Organization rules if the EU does not open its market by a May 13 deadline .

The WTO has twice ruled that the EU's ban on imported beef produced from cattle injected with artificial growth hormones violates international trading rules. Last year, the WTO gave the EU 15 months to comply.

The United States remains ready to work with the EU on a “reasonable” labeling system that would allow EU consumers to decide whether to eat hormone- treated beef, Scher said. But so far, “the EU has not been willing to give us any commitment that they would implement a label and lift the ban,” he said.

Many of the items on the preliminary list were agricultural goods. “A great deal of it is meat, including beef, pork and poultry, since that is what is being blocked by the EU,” Scher said. Other targeted goods include motorcycles, hair clippers, yarn, flowers, chestnuts, chocolate, processed tomatoes and other fruit and vegetable products.

In early June, the United States will publish a final list of goods that would be subject to 100% duties if the EU does not lift its import ban. U.S. farm groups have urged the Clinton administration to set the final retaliation list at at least $500 million, but Scher said that decision has not been made yet.

“We haven't made that determination,” Scher said. “The final damage estimate will reflect whatever we think our yearly loss is” due to the import ban, he added.

The EU's executive body called the dollar value of the preliminary list “particularly troublesome.” Three years ago, the United States estimated the annual value of lost trade from the ban at just $100 million, the European Commission said.

But when the United States began WTO dispute settlement proceedings in 1996 to end the longtime ban, the U.S. cattle industry began pushing for a higher damage figure. They argued that trade would have grown at least several hundred million dollars annually without the ban.

In its statement, the EU raised the idea of compensating the United States “in the form of new trade concessions to the U.S. beef industry.” But Scher said compensation would only be acceptable on an interim basis if the EU committed to opening its market to hormone-treated meat and then needed time to implement that action.

That view was endorsed by a leading farm state senator.

“We don't want to retaliate and we don't compensation,” said Sen. Max Baucus, a Montana Democrat. “We want access for our beef. We won and they lost. It's time to comply.”

Meanwhile, the U.S. Trade Representative's Office will prepare to hold a hearing in late April on its preliminary retaliation list.

Once the final list is prepared, the earliest the sanctions could go into effect is June 12, Scher said. However, the EU could delay the sanctions until July 12 by exercising its rights under the WTO, he said.

The six artificial growth hormones in question have tested safe since the 1950s, Scher said.

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