Meat and drink of transatlantic upsets

Date: 26/02/1998

By Myles Neligan

THE main feature of the EU-US trade in agricultural products over the last two years has been a string of high-profile disputes over chicken, bananas, cheese and - less appetisingly - bovine offal, growth hormones and genetically-modified plants.

The value of transatlantic farm trade has grown by 7&percent;, to 1.4 billion ecu, over the same period. But both sides regret the economic cost, estimated at 333 million ecu, of the disruption caused by these disputes.

Both also fear that the atmosphere of mutual incomprehension and, at times, distrust which characterises EU-US farm trade relations may prove more costly still.

Union experts attribute this proliferation of trade disputes partly to the foundation of the World Trade Organisation in 1994, which for the first time provided the liberalised and export-oriented US with the legal instruments to pick holes in the EU's more protectionist Common Agricultural Policy.

Later, the European Commission began invoking the GATT sanitary and phytosanitary agreement to restrict certain US exports when consumer protection issues rose to the top of the political agenda after the BSE crisis.

The EU has strongly criticised Washington for imposing crude free-market solutions in areas where it feels social and environmental considerations should be taken into account.

This stance is reflected in the EU's insistence that the liberalisation of its farm sector must be tempered by measures to preserve its unique model of diverse, small-scale agricultural production.

The Union also cited this argument in the dispute over its preferential import regime for African, Caribbean and Pacific (ACP) bananas, which the US successfully challenged in the WTO last year despite protests that this would deprive ACP growers of their livelihood.

The US replied that all parties would benefit if only the Union would open up its markets further. It is also highly sceptical of the EU's use of food safety arguments to restrict imports of US poultry, meat and beef, alleging that this is protectionism pure and simple.

The ongoing dispute over the EU's ban on specified risk materials (certain livestock offals that carry the BSE agent), which obliges trading partners to remove the offending offals from Union-bound exports of meat and related products, has highlighted US resentment on this score.

“The EU protests at the extra-territoriality of some of our legislation, but it is guilty of exactly the same thing, only it's all done in the name of food safety,” said one US official. “Trade problems will continue to arise until the EU introduces sensible policies in this area,” he added.