990606 EU Hopes to Avoid Sanctions in Beef Row

Brussels - The European Union still hopes the United States will agree to accept compensation in a row over hormone-treated beef rather than impose sanctions on EU exports, an EU spokesman said.

“We don't believe sanctions are the best way to solve this,” Nigel Gardner, a spokesman for European Trade Commissioner Sir Leon Brittan, told reporters.

“Compensation, offering the United States improved market access for their goods in the European market, would be better for European industry. But of course it would also be better for American consumers and we very much want to go down this route,” Gardner said.

EU officials point out that U.S. consumers will have to pay much higher prices for European goods hit by the duties.

Washington is asking the World Trade Organisation (WTO) to authorise $202 million in punitive tariffs after winning a WTO case against the EU's ban on imports of hormone-treated beef.

Canada, another plaintiff in the case, has said it will seek trade sanctions worth C$75 million ($51 million).

In Geneva, the EU on Thursday asked for WTO arbitration on the level of sanctions. The request was granted and WTO arbitrators will decide by July 12 on the amount of duties the United States and Canada may impose, trade officials said.

The WTO ruled last year that the EU's decade-old ban on the import of hormone-treated beef broke international trade rules.

The United States said the ruling meant the EU had to lift the ban by May 13, but the EU said it simply had to provide more scientific evidence to back the ban.

It refused to lift the ban after EU scientists found evidence that one of six hormones commonly used in the North American beef industry could cause cancer.

Speaking on CNN on Thursday, Brittan said the sanctions figure sought by the United States was “grossly excessive.”

“They haven't suffered that amount of damage, so they won't get away with that,” he said.

He declined to specify what level he thought they should be, but an EU source said $50 million to $100 million was “a more realistic ballpark figure.”

U.S. Trade Representative Charlene Barshefsky has said she believed the sanctions figure “would stand up very well to scrutiny.”

Brittan repeated the EU's view that temporary compensation -- in the form of increased access to EU markets for other U.S. goods -- should be offered until definitive scientific evidence on the safety of beef treated with hormones is available.

“We have a lot of new evidence that shows that hormone-treated beef can be dangerous. That's an interim view but if you have that no responsible government is going to say we are going to lift the ban,” he said.

“The sensible thing to do is for scientists on both sides of the Atlantic to get together and to start looking at this new material rather than engaging in megaphone diplomacy, shouting slogans and insults to each other,” he added.

He highlighted that half the scientists involved in drawing up the EU's interim report, which said one of the hormones used by the U.S. cattle industry may cause cancer, were Americans.

“There have been new studies...which show there is a problem with these hormones and some of the people who have done these studies are Americans, four out of a team of eight are Americans. This just can't be dismissed,” Brittan said.

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