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. Last Updated: 07/27/2016

U.S. to Punish EU Over Cattle Imports

WASHINGTON -- U.S. retaliation on $116.8 million of European Union goods in a long-running beef trade dispute should be in place by the end of July, a top U.S. trade official said Tuesday.

Peter Scher, special U.S. ambassador for agricultural trade, also told reporters that the United States would consider a suggestion by U.S. cattle producers to impose the heaviest punitive duties on France, Germany and Britain.

But in the end, the composition of the retaliation list will be determined by a number of factors, including a desire to minimize the impact on small U.S. businesses that depend on EU goods for much of their inventory, Scher said.

"Obviously what we want to do is maximize our leverage over the European Union" while harming U.S. firms the least, he said at a news conference with meat and farm groups.

British Trade Minister Brian Wilson urged Washington to refrain from launching a trade war over hormone-treated beef. "It is wrong to pursue a dispute by taking action against companies and communities that have absolutely nothing to do with that dispute," he said.

On Monday, a World Trade Organization arbitrator ruled that the EU's decade-old ban on beef from cattle raised with artificial growth hormones cost U.S. producers $116.8 million in annual lost sales and Canadian producers $11 million.

That low damage figure - the United States had asked for $202 million and Canada $51 million - made it vital that the United States construct a retaliation list that gets "the attention of larger EU states," said Richard Kjerstad, South Dakota Farm Bureau president.

For that reason, a proposal by the U.S. hog industry to target just EU pork products would be an ineffective strategy, said Chandler Keys, vice president of the National Cattlemen's Beef Association, or NCBA. The two largest EU pork producers, Denmark and the Netherlands, don't have as much influence as larger member states do, he said.

"Let's name names. It's England, France and Germany. They're the players here. They can bring a package to the table that maybe we can start negotiating from," Keys said.

The NCBA, American Farm Bureau Federation and American Meat Institute have urged the White House to use a "carousel" approach to retaliation by imposing the full weight of 100 percent punitive duties on goods from just one or two EU countries at first and then rotating to products from another set of EU countries after a period of time.

U.S. President Bill Clinton's administration has not decided yet whether to follow that approach, Scher said.

In late March, the United States listed about $900 million of EU goods that could be hit with 100 percent duties if the EU did not drop its ban by a May 13 deadline. Now that the WTO has approved a retaliation level, a final list will be issued in 10 days and the duties in effect by late July, Scher said.

The United States is willing to discuss the EU's offer of trade compensation, but only "as a bridge toward compliance" with the WTO ruling, he said.

Scher expressed hope the weight of WTO rulings against the EU in the beef and an earlier banana case would prompt a change in policies. If not, "the EU will have a big scarlet 'F' for its failure to comply with the WTO," he said.

Earlier this year, Washington imposed $191.4 million in tariffs on EU goods ranging from handbags to bed linens after EU rules on banana imports were found to violate WTO rules.

The EU's stance is also at odds with the image it presents as an advocate of countries working together to solve problems instead of acting unilaterally, Scher said. "What we have here is essentially the largest trading bloc in the world saying we're not going to comply with the rules," Scher said.