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Wednesday, May 12, 1999 Published at 09:48 GMT 10:48 UK

Business: The Economy

US beef trade row talks fail

US farmers are angry at being locked out of the European market

The United States and the European Union have failed to reach a breakthrough in a bitter trade row over US hormone-treated beef.

BBC News' Patrick O'Connell: More EU products to be targeted in latest row
US Trade Representative Charlene Barshefsky held talks with European Commission vice president Leon Brittan in Tokyo on Wednesday in a bid to resolve the issue.

Asked whether any new proposal was made, Ms Barshefsky told a group of reporters: "No, we just had general discussions."

[ image: Sir Leon Brittan is offering compensation as a compromise]
Sir Leon Brittan is offering compensation as a compromise
The World Trade Organisation has given the European Union until Thursday to lift its 10-year-old ban on the sale of US hormone-treated beef.

The EU has said it will maintain its ban because of fears that the growth hormones could cause cancer, nerve disorders and other health problems - an argument rejected by the United States.

The EU wants more time to complete scientific research.

But Washington has vowed to impose £600m ($900m) worth of sanctions on EU products including pork, beef, chocolate and even motorbikes if Brussels does not back down.

Ms Barshefsky warned: "We, as you know, have rights in the WTO of compensation or retaliation in the event a trading partner does not comply with a dispute settlement ruling.

"We will not drop our plan. We intend to avail ourselves of our WTO rights and seek authorisation to retaliate."

Compensation offer

On Monday, Sir Leon Brittan said in Berlin that he was ready to offer to pay compensation to the United States as a compromise.

He said the expected compensation would involve lowering duties on other goods from the United States and Canada, whose beef is also banned for the same reason.

Mr Brittan said: "I don't have an instant solution and recognise that we're not going to be able to do anything specific by May 13.

"That's why we should look toward a compensation solution," Mr Brittan said.

US farmers angry

Hormones are widely used in US agriculture, with more than 90% of American cattle producers feeding them to their cattle to make them grow faster and bigger.

[ image: Growth hormones are widely used in US agriculture]
Growth hormones are widely used in US agriculture
In 1989, the United States promised to export only hormone-free beef to Europe because of the union's ban.

However, several weeks ago EU experts discovered that some of the US beef labelled 'hormone free' did in fact contain banned growth hormones.

The cattle industry has put lost export sales at $500m annually.

George Swan of the US National Cattlemen's Beef Association said: "Ten years of delaying tactics, ten years of false accusations, ten years of lost markets for US cattlemen and lost opportunities for European consumers.

"It is time for the EU to play fair with us and with its own people."

US trade spokesman Peter Sher said: "This course of action is not one we chose and not one we desire, but one which unfortunately we have to take to demonstrate once again that there is a price to pay for repeated failure to comply with WTO obligations.

"If countries like the EU continue to fail to meet their obligations, then industries in Europe will have to suffer just like the cattlemen have suffered," he added.

But an industry association of European retailers, UNICE, accused the United States of inflammatory rhetoric.

"These are exactly the sharp words that will not serve to bring this to a resolution," said UNICE secretary-general Dirk Hudig.

The beef row is just the latest sign of escalating tensions between the US and the EU - America recently slapped $191.4m (£117m) worth of sanctions on EU products because of a row over banana imports.

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