U.S. Beef Sanctions Get Green Light

GENEVA -- The World Trade Organization on Thursday approved a U.S. and Canadian request to impose sanctions against the European Union because of its ban on hormone-treated beef imports, trade officials said.

A meeting of the WTO Dispute Settlement Body also agreed to an EU request for a neutral arbitration panel to assess the amount due. The panel should report back by mid-July, delaying the implementation of any sanctions until then.

Under WTO procedures, approval of both requests was automatic.

The United States wants to impose retaliatory 100 percent duties against $202 million of EU exports - the amount of trade it says it has lost because of the 11-year ban. Canada has threatened sanctions on trade worth 75 million Canadian dollars (U.S. $51 million).

At Thursday's meeting of the WTO Dispute Settlement Body, the EU challenged that amount as much too high and asked for neutral arbitration.

EU delegate Ian Wilkinson said the $250 million total "exceeds by a long way any legitimate loss they might have suffered.''

U.S. trade ambassador Rita Hayes said Washington would still prefer a negotiated settlement to avoid sanctions, but that the EU had shown this was impossible.

"The concern that we have is that we give access to U.S. producers to the European Communities and that there is a choice for EU consumers to have high quality U.S. meat,'' Hayes said.

Hayes said once the WTO arbitration panel had set the amount of damages, then Washington would issue a final list of products which will be subject to retaliatory duties. It has drawn up a preliminary list worth $900 million including canned hams, pork, beef and poultry, various tomato products, Roquefort cheese, truffles, onions, chestnuts, paprika, goose liver, chewing gum, chocolate and mineral water.

The EU maintains that some of the hormones may cause cancer. It is conducting further scientific studies on their safety. Meanwhile, it has refused to lift the ban, even though the WTO has ruled it has no scientific basis.

The "mad cow'' scare in Europe sent beef consumption plummeting and political leaders are worried about provoking a consumer backlash - and upsetting the powerful farming lobby - over hormone-treated beef. Some 90 percent of the beef produced in the United States and Canada uses hormones approved by the U.S. Food and Drug Administration to make cattle grow faster and bigger.

The United States is already applying tariffs against $191 million of EU products in another WTO dispute, over European rules on banana imports.

The United States was widely criticized for retaliating against the EU in the banana dispute before receiving final WTO approval. The EU and its allies resorted to procedural blocking tactics to try to delay any WTO decision, thus throwing the Geneva body into legal crisis.