990732 U.S. Imposes Sanctions in Beef Fight

Washington - Ham from Denmark, chocolate from Germany, tomatoes from Italy and truffles, mustard and Roquefort cheese from France will start disappearing soon from American store shelves, victims of trade fight between the United States and Europe.

The Clinton administration announced the final list of $116.8 million in European products that, beginning July 29, will be subject to 100% tariffs in retaliation for Europe's refusal to drop its ban on American beef raised with growth hormones.

While more than 90% of American cattle producers feed hormones that have been approved by the Food and Drug Administration, Europe imposes a ban on the grounds that scientific studies have not proven conclusively that hormone- treated beef is safe.

The World Trade Organization, however, ruled in a case brought by the United States that the EU ban was not justified. The WTO said there was scientific evidence that the beef was safe for human consumption.

The National Cattleman's Beef Association said U.S. producers were happy with the initial sanction list but may still push the Clinton administration to consider a rotating list of products designed to bring pressure on more European countries.

“This is a good start,” said Alisa Harrison, a spokeswoman for the group. “But if we don't think this is having a big enough impact to get the message across, we will continue to urge a carousel approach.”

The list of $116.8 million in sanctions in the beef case marked the second set of trade sanctions the United States has imposed this year against the 15- nation European Union. In April, the administration targeted $191.4 million in European products ranging from handbags to bed linen in a dispute involving trade barriers against American banana companies.

In both cases, the EU refused to eliminate trade barriers after losing cases before the Geneva-based WTO.

Assistant U.S. Trade Representative Peter Scher called the EU “the lone outcast” among the WTO's 134 members because of its refusal to comply with adverse trade rulings.

But EU Agriculture Commissioner Franz Fischler said in Brussels, Belgium, that he felt “deep regret” at the U.S. decision to go ahead with sanctions rather than accept an EU offer for compensation.

Under that approach, the EU could have lowered WTO-legal trade barriers on other U.S. products to expand American sales in an amount equal to the economic harm U.S. beef producers are suffering.

In the beef case, the final product list was selected from a preliminary list of $900 million that the United States published earlier in the year. Left off the final list were such items as Perrier and other European mineral waters, European motorcycles and oat products.

The final products were chosen to minimize the impact on American companies and consumers, Scher said. In all cases, he said, substitute products were available either domestically or from non-European sources.

The 100% tariffs are designed to eliminate the targeted products from U.S. store shelves in an effort to inflict economic hardship on European producers equal to the amount of lost sales American beef producers are suffering.

The final list was selected to bring maximum pressure on four nations that the United States believes could make the difference in EU discussions on lifting the ban on beef raised with growth hormones.

France and Germany each accounted for 24% of the items on the list, Italy for 21% and Denmark for 15%. Britain was left off the list because it has been supporting U.S. efforts to have the beef ban lifted.

In terms of products, the biggest item covered various European pork products, including Danish canned hams, totaling $30 million annually, or 26% of the $116.8 million of the total.

Other products targeted included fruit juice, $20 million; tomatoes, $16 million; mustard including Dijon mustard, $5 million; Roquefort cheese, $4 million; truffles, $3 million, and goose liver, $1 million.

There were two non-food items on the list, German yarn, with estimated imports at $4 million, and $2 million in glue and adhesive products.

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