New York Times
March 23, 1999
Imports Face Higher Tariffs on Beef Issue
By DAVID E. SANGER
WASHINGTON -- The United States prepared to open a new front in its trans-Atlantic trade disputes Monday, publishing a list of $900 million in European goods like truffles and French foie gras that could be subjected to 100 percent tariffs if American farmers were not permitted to export hormone-treated beef to Europe.
On the list were mainly food items, including Evian, Perrier, Ricola cough drops and imported Dijon mustard. But there also were some manufacturing goods, like mopeds and smaller motorcycles by Bianchi of Sweden.
The announcement came in response to European statements that it would not be able to comply with a ruling from the World Trade Organization to end its ban on hormone-treated beef by May 13. The organization concluded that Europe's rules prohibiting sale of the beef were based on faulty science.
The issue has become a heated political topic in Europe, along with the arguments over whether European rules on banana imports are designed to discriminate against fruit handled by two American companies, Chiquita Brands International and the Dole Foods Co. The United States has begun to impose 100 percent tariffs on $500 million in European luxury good imports in retaliation for Europe's refusal to comply with the trade organization's rulings in that dispute.
Like the banana arguments, the battling over beef hormones has been going on for years. And, as in the banana case, the United States is moving quickly to threaten retaliation, in hopes of creating pressure on European politicians from companies that will find themselves virtually unable to ship goods to the United States -- unless they pay a 100 percent tariff, doubling the wholesale price.
While the U.S. trade representative's office published a "target list" of $900 million in goods subject to retaliation, including Swedish hams, that list will be pared significantly before any tariffs go into effect. American beef farmers put their losses because of the hormone rules at several hundred million dollars, and the final list is expected to contain about $300 million in European goods sold here.
Prior to the imposition of the tariffs, Europe could negotiate some form of compensation for American beef farmers. But on Monday, Peter Scher, who heads agricultural negotiations for the trade representative's office, said that "compensation is meant to be a bridge to ending the ban, and the E.U. has never made it clear it will comply with the ruling."
Scher said that negotiations are under way to allow for the hormone-treated beef to be clearly labeled for European consumers, who could avoid buying it if they were uncomfortable with the products. But Scher noted that there was "no evidence of any health risks" related to consumption of the beef.
For the Clinton administration, more is at stake in these battles than beef and banana exports. Clinton has argued that the European Union has to be taught to abide by trade organization rulings. The Europeans counter that the United States is jumping the gun, imposing retaliation before the appeals process is complete.
Europe has long argued that there can be long-term health effects to treating beef with hormones, and that the effects may not be known for years. The United States has countered that Europe's motivation is essentially protectionist, and that it has used bad science in the service of keeping the market closed to competition.