WTO set to agree reduced US sanctions in beef hormone row

Date: 08/07/1999

By Simon Taylor

THE US is expected to get the go-ahead from the World Trade Organisation next week to impose sanctions on €120-150 million of EU exports in the ongoing dispute over beef hormones.

The sum is less than the annual €202 million in lost beef sales Washington claims it suffers as a direct result of the EU's ban on imports of hormone-treated meat. European Commission sources predict that WTO arbitrators will rule that the lower figure reflects a more accurate assessment of US losses.

Once the WTO has delivered its ruling, the sanctions could come into effect ten days later, after Washington has decided precisely which EU exports to hit with punitive duties. Targets on the US' initial h900-million list included French and Italian mineral water, Danish pork products and German animal feed.

EU officials say that once the level of sanctions has been decided, discussions may restart on a possible compensation package as an alternative to the trade penalties. This would involve offering the US better access on a range of imports, but talks on a possible deal have failed to make any progress over recent months.

The EU had been contemplating increasing the import quota for hormone-free beef from the US, but problems with illegal residues in American meat imports have scuppered this approach.

The issue is expected to be discussed by Acting Farm Commissioner Franz Fischler and his US counterpart Dan Glickman during a meeting of farm ministers from the world's five leading agricultural trading nations in Canada which begins next Thursday (15 July).

Commission officials believe that unless a compensation package can be agreed, the sanctions will remain in place until the EU takes a final decision on whether to continue its hormone ban, probably at the end of this year. Union policy-makers are waiting for scientific research into the health risks of hormones before finalising their stance.