990551 EU Hopes Talks Will Avert U.S. Beef Sanctions

Brussels, - European Union officials said they hoped talks with the United States over the next few weeks could avert a U.S. plan to impose $202 million of duties on EU products over the bloc's ban on hormone-treated beef.

U.S. officials said earlier they would ask the World Trade Organization for authority to impose the duties after the EU refused to lift a decade-old import ban on hormone-treated beef by a May 13 WTO deadline due to health worries.

A European Commission spokesman had no comment on the U.S. figure and could not say whether the EU would seek WTO arbitration on the amount as it can do under WTO rules.

“We are talking to the Americans. We have 19 more days to discuss (the issue). We hope we can come to an agreement,” he said. “If the Americans want to retaliate, they will have to do that respecting WTO procedures.”

Canada, another plaintiff in the WTO case, has also threatened sanctions against the EU.

WTO rules call on parties to a dispute to negotiate on “mutually acceptable compensation.” If no agreement is reached 20 days after the deadline for complying with a WTO ruling, the complaining party can seek authorisation to retaliate.

The EU could seek arbitration on the amount of sanctions, which would delay their implementation until mid-July.

The final U.S. sanctions figure was much lower than the $900 million of EU goods targetted for possible sanctions in an initial U.S. list in March. It was also lower than the $300 to $350 million predicted by one EU official earlier this week.

The United States has not yet published the list of EU goods that it will hit with 100% duties. They will be drawn from the initial list which included beef, pork, poultry, motorcycles, hair clippers, yarn, flowers, chestnuts, chocolate, processed tomatoes and other fruit and vegetable products.

Jean-Luc Meriaux, secretary-general of the European Livestock and Meat Trading Union, said the impact of the U.S. sanctions would depend on the final list of products affected, “but if pork is included it is not good news at all.”

“The United States is Europe's third biggest export market after Russia and Japan. Last year we exported 70,000 tonnes of pork to the U.S.,” he said.

“Europe's pork market is very weak at the moment and this will mean there is more meat on the domestic market. It will be up to the industry to find other markets for it,” he said.

Agri-food analyst Bruce Ross, at Ross Gordon Consultants in Brussels, said: “We'll have to see what products are targetted but you can bet there will be political reasons for those singled out for sanctions.”

“I think the EU will continue to use all legal means at its disposal to challenge the sanctions ...,” he said.

Consumers' perception of beef remained fragile after the mad cow crisis “and there would have to be a very good reason for the EU to lift the ban,” he said. “The EU will have to look to do some sort of deal with the U.S.”

The EU's executive Commission ruled out lifting the ban after an interim EU scientific report this month found evidence that one of six hormones commonly used in the North American cattle industry could cause cancer.

The United States insists hormone-treated beef is safe.

Both sides are willing to continue talks on compensation. The EU is offering to compensate the United States for lost beef exports by offering greater access to the European market for other products, including hormone-free beef.

However, the United States says the EU must commit to opening its market to hormone-treated beef, which the EU is unwilling to do.

Only last month, the United States won WTO authorisation to impose $191 million of sanctions on EU exports in a separate row over the EU's banana import policy.

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