U.S. Picks a Beef That May Unify Europe Fast

When old friends fall to quarreling, it is often a sign of stress in the relationship. This is certainly the case with the latest imbroglio between the United States and the 12 countries of the European Economic Community. The dispute, which threatens to erupt into a full-scale trade war, stems from the Common Market’s decision to ban all imports of beef treated with hormones beginning Jan. 1, 1989. As almost all cattle raised in the United States are dosed with steroids to enhance their growth, the ban would effectively cut off exports of U.S. beef to the EEC countries --a trade amounting to about $160 million per year.

U.S. trade officials have not accepted the impending rule gracefully. Shortly before meeting with Common Market officials in Brussels this month, U.S. trade representative Clayton K. Yeutter said that if the ban was not modified, U.S. trade reprisals would come “within 10 minutes.” At the meeting, also attended by U.S. Secretary of Agriculture Richard E. Lyng, the Europeans offered a number of compromises, including exempting meat intended for pet food--which makes up at least a third of U.S. beef exports to the EEC--and increasing imports of higher-quality beef. The proposals were rejected, however, and a few days later U.S. officials announced their intention to unroll a series of retaliatory measures, which could affect trade worth $450 million annually. The Europeans, for their part, have begun drawing up a list of counter-counter-measures, and thus does the snowball roll down the hill. The backdrop for this squabble is the planned merger of the EEC countries--Belgium, Britain, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and West Germany--into a unified economic market by the end of 1992. The result will be a barrier-free flow of trade between members. This development has generally been welcomed by the Common Market’s major trading partners, the United States and Japan, in part because it will eventually eliminate the Byzantine network of regulations and standards that foreign companies seeking to do business in Western Europe have had to negotiate.

On the other hand, many trade officials and businessmen in the United States and Japan have become increasingly concerned that “1992” may bring the specter of “Fortress Europe.” They fear that as EEC members drop barriers to intra-European trade they will erect new protectionist walls to restrict competition from outside. These suspicions have been reinforced by a number of recent Common Market actions, including the adoption of so-called “anti-dumping” measures directed in particular against lower-priced high-technology products from Japan. Yet European officials complain bitterly that their trade partners want to have their cake and eat it, too. “If Europe remains disunited, we are accused of Europessimism and Eurosclerosis,” said Roy Denman, head of the EEC delegation in Washington. “If we press ahead with unification, we are greeted with cries of ‘Fortress Europe’.”

To the extent that the concerns over protectionist barriers are legitimate, the United States has nevertheless picked an odd point on which to make its stand. The prohibition of hormone-treated beef applies not just to imports from abroad but also to all cattle raised within the member countries. In fact, within the EEC the ban has been in effect since Jan. 1, 1988, and was the result of years of campaigning by consumer activists who were concerned about possible harm from a wide variety of meat additives. By heavy lobbying, the United States was able to negotiate a one-year reprieve, which will expire on Jan. 1. European feelings on the subject have been particularly strong, especially after the recent scandal over a West German producer that illegally put a huge amount of veal on the market treated with what France’s leading consumer magazine dubbed a “cocktail of prohibited hormones.” Yet U.S. officials insist that hormone-treated beef is safe, and accuse the Common Market of erecting, in Yeutter’s words, “a non-tariff barrier to trade.” But whatever the scientific merits of the ban, for the EEC countries it has the force of law. Moreover, the U.S. cattle industry has had a full year to develop hormone-free beef for export.

What if the shoe were on the other foot? For years foreign automobile manufacturers have been required to produce specially equipped models to meet U.S. pollution-control standards, which are much tougher than those in force in Europe. If European countries suddenly threatened retaliation unless the U.S. Congress rescinded our air-quality laws, the attempt at intimidation would be met with howls of indignation.

In a recent front-page editorial the French daily Le Monde, pointing out that the threatened American trade reprisals would fall more heavily on some countries than on others, accused the United States of attempting to “divide Europe so as to better impose its views . . . . The use of force reveals one more time the importance of unity among the Twelve.” By choosing to use a bludgeon against its trade partners, the United States may be helping to make “Fortress Europe” a self-fulfilling prophecy.