000224 US Mulling New Beef Retaliation Against EU

Washington - In a sign that a trans-Atlantic beef dispute may be heating up again, Washington is considering whether to hit a new group of European Union goods with retaliatory duties, a top U.S. official said.

Washington imposed the duties last year to punish the EU for its continued refusal to open its market to U.S. beef produced from cattle raised with artificial growth hormones.

The 100-percent duties hit a wide range of EU food products, including such gourmet items as pate, Roquefort cheese and Dijon mustard. EU pork and beef products also figured prominently on the list.

American farm groups have urged the Clinton administration to periodically rotate the duties to a new set of goods to keep the EU off guard and motivated to reach a negotiated solution.

In testimony before a House Ways and Means subcommittee, U.S. Trade Representative Charlene Barshefsky said she had asked a Clinton administration interagency panel to quickly examine the impact of rotating the $116.8 million in retaliatory duties to a new set of goods.

Once the panel makes its recommendation, “we'll proceed as quickly as possible,” Barshefsky said.

Brussels has kept its decade-old ban on the imports despite losing a series of World Trade Organization rulings.

Barshefsky previously expressed little enthusiasm for the idea. But she promised last year she would examine the issue after the Seattle WTO ministerial meeting, which was held in early December and ended in failure.

Barshefsky told the Ways and Means subcommittee she has asked the interagency panel to focus on two issues: Whether changing the retaliation list could negatively affect negotiations with the EU, and, what impact a change would have on U.S. consumers and businesses.

She declined to offer a timetable. “I don't want to put a date on it,” she said.

There remains a chance that current discussions with the EU will bear fruit, without rotating the duties to a new set of goods. “I think we are making a little progress, but I have no news to report,” Barshefsky said.

The United States may have a clearer picture of the opportunity for a deal after Wednesday, when EU veterinary officials are expected to vote on whether to continue allowing imports of U.S. “hormone-free” beef.

After EU official detected artificial growth hormone residues last year in supposedly hormone-free U.S. beef, the Agriculture Department revamped its program to ensure compliance with EU requirements.

Last fall, the Agriculture Department approved one Oklahoma ranch and two Nebraska meat processors to ship beef to the EU under the revamped program. EU veterinary experts tentatively approved the new U.S. procedures in November, but are scheduled to revisit the issue on Wednesday.

If the veterinary panel once again gives its okay, that could encourage more U.S. cattle producers and meat packers to go through the lengthy certification process for the Non-Hormone Treated Cattle Program.

The National Cattlemen's Beef Association, a U.S. industry group, has said it would be willing to accept increased access to the EU hormone-free beef market in exchange for the United States dropping the retaliation.

However, that would depend on the hormone-free program being up and running on a permanent basis, the group said.

As a matter of principle, the United States could also insist as part of deal that the EU commit to eventually opening its market to hormone-treated beef.

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