000662 USDA Wants Beef Retaliation Focused on France

Washington - The U.S. Agriculture Department, anxious for progress in a long-running beef trade dispute with the European Union, wants to focus the brunt of $116.8 million in retaliatory duties on products of France, a department official said.

The United States has had 100% duties on $116.8 million of EU goods since July 1999 in the hope of pressuring the EU into dropping its 12-year-old ban on beef produced with artificial growth hormones.

New legislation requires the Clinton administration to change the retaliation lists in the beef dispute every six months. It must do the same for another $191.4 million of retaliatory duties imposed in April 1999 in a dispute over access to the EU's banana market.

The aide, who asked not to be identified, said the Agriculture Department's new hit list included bottled water -- such as Perrier and Evian -- and Roquefort cheese, canned peaches, foie gras, Swedish sausage and some beef products.

The Agriculture Department's desire to target France comes just before that country assumes the presidency of the EU on July 1 for the next six months, the aide said.

By coincidence, both the EU presidency and the list of EU goods hit with steep U.S. duties in the two disputes will change at roughly the same time every six months under the new “carousel” retaliation provision.

The current $116.8 million falls primarily on food products of France, Germany, Denmark and Italian. Roquefort cheese, foie gras and beef products are on the current list, as well as onions, prepared mustard, soups and yarns.

Adding bottled water “opens the curtain (on the trade dispute) so everyone can see,” the department aide said.

One factor that has made it difficult to get the EU to change its policies is the relatively little public attention that has been paid to the dispute, the aide said.

Many non-French items would have to fall off the list to stay within the cap set by the World Trade Organization, which only allowed the United States to block $116.8 million worth of trade in the beef dispute, the aide.

The U.S. Trade Representative's office has already missed its June 19 deadline for announcing the revised retaliation.

On Tuesday, U.S. Trade Representative Charlene Barshefsky said her office was still wading through some 400 comments from businesses and industry groups that could be affected either positively or negatively by the change in the retaliation.

A decision could be announced Friday, but it is more likely the issue could will drag onto into next week, the agriculture department aide said.

Other administration agencies see problems with targeting the country that holds the EU presidency because it could complicate work on other bilateral issues, the aide said.

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