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Tuesday, July 13, 1999 Published at 10:15 GMT 11:15 UK

Business: The Economy

The beef war

The EU is worried about possible health risks

Is beef from cattle reared using growth hormones safe for human consumption? The EU says no, blocking all imports. The United States says this amounts to protectionism.

World trade wars
The World Trade Organisation (WTO) has now allowed the US to impose sanctions worth $116m - far less than the original US demands of up to $900m.

The next trade war is about to break out.

The European Union has made it clear that it will not allow American hormone-treated beef into Europe until it is sure the meat is safe. Its own scientific research has dragged on for a decade now, and a final report is not yet in sight.

During the conflict, the EU refused to meet the deadline set by the WTO to justify the ban, saying research into possible health risks is incomplete.

The BBC's Hayley Miller reports on how US sanctions have hit on company in Arran
America is now preparing a detailed list of European products subject to the punitive sanctions.

EU exporters could soon be hit by tariffs of 100%.

European trade negotiators have repeatedely offered to pay compensation to US farmers or allow North American producers better access to other markets.

The US, however, believes that only punitive tariffs will persuade the EU to change its rules.

Fundamental disagreement

But the US Trade Representative Charlene Barshefsky accused the EU of 'misleading reports' which will make the dispute harder to settle.

"We are taking this action as a last resort," she added.

The positions of the United States and Europe over beef raised with artificial hormones could not be more different.

[ image: The US says Europe must accept its beef imports]
The US says Europe must accept its beef imports
The US says Europe must comply with the WTO ruling and accept imports of US beef.

But the European Union 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 Americans have already introduced $191m in punitive tariffs in another trade dispute over bananas.

In late March, US trade officials had published a preliminary list of EU food and other products worth more than $900m that could be hit with 100% punitive tariffs.

The list includes products as diverse as pork, raspberry jam and scooters.

US farming groups had demanded at least $500m in compensation for their lost business.

US agribusiness

[ image: Hormones are given to most US cattle]
Hormones are given to most US cattle
Hormones are widely used in US agriculture, with more than 90% of American cattle producers implanting them into their cattle or adding them to feed, to make them grow faster and bigger.

In 1989, the United States promised to export only hormone-free beef to Europe because of the EU's ban.

But earlier this year, EU experts discovered that some of the US beef labelled "hormone free" did in fact contain banned growth hormones.

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