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Wednesday, May 19, 1999 Published at 15:54 GMT 16:54 UK

Business: The Economy

US beefs about Europe

Cattle are at the heart of another costly trade war

The authority of the World Trade Organisation (WTO) is being threatened by Europe's refusal to comply with its rulings, US agriculture secretary Dan Glickman has warned.

World trade wars
The secretary, speaking in Ireland, said the European Union's refusal to lift a ban on hormone beef weakened the WTO.

"In order for the WTO to work, its members have to respect its institutional authority," he said.

"But in choosing to maintain its ban on beef from hormone-treated cattle, in my judgement the EU has put all this at risk," he told the World Meat Congress in Dublin.

But he added that he did not want "to bang on the podium" and said no one was served by turning the rhetoric "up another notch".

"The American people have asked all the questions and have demanded the answers," added Mr Glickman.

"That's why we have such a strong regulatory system...The American people are as discriminating as anyone about what they consume. Don't confuse their acceptance with complacency."

The US has asked for a special meeting of the WTO to be held on 3 June to authorise $202m worth of sanctions against European goods.

Washington is entitled to slap punitive tariffs against EU products because Brussels failed to meet a 13 May WTO deadline for lifting its 10-year ban on hormone-treated beef imports.

But the sanctions first need the official approval of the WTO's Dispute Settlement Body.

Health risk disputed

The European Union has not challenged the legality of American retaliatory sanctions but it contests the $202m figure.

The Americans disagree with the EU view, saying there is no threat to health from treating cattle with hormones to make them grow bigger and quicker.

The dispute is following the same pattern as one over bananas which has led to the US imposing WTO-approved retaliatory sanctions on a range of EU products.

In both cases of tit-for-tat sanctions the WTO is seen to have failed to fulfil its founding role, of finding negotiated solutions to trade disputes.

With both sides standing their ground EU officials are expected to ask at the June meeting for a neutral arbitration panel to decide on the level of damages - which must be set by 13 July.

Concessions offered

Despite the WTO ruling against the ban, Brussels has refused to lift it pending the outcome of further scientific studies on the health effects of hormone treated beef.

EU trade commissioner Sir Leon Brittan has offered North America trade concessions in other areas to compensate for lost beef markets.

But Washington has rejected the compensation offer.

It says that the $202m figure is the estimated value of beef which would be exported annually if there were no ban.

It has not yet named the final products to be hit by sanctions.

A preliminary list included canned hams, pork, beef and poultry, various tomato products, Roquefort cheese, truffles, onions, chestnuts, paprika, goose liver, chewing gum, chocolate and mineral water.

The United States is already applying tariffs against a range of EU products ass a result of the banana dispute.

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