U.S. Trade War Looms as Europe’s Meat Ban Takes Effect

European officials are concerned that a new ban on importing U.S. hormone-fed meat, which goes into effect today, will escalate into a full-blown trade war between the United States and the European Community.

The dispute, if not resolved quickly, could lead to an exchange of even greater trade sanctions between the United States and Europe, diplomatic specialists say, but, more dangerously, could strike at the structure of the North Atlantic Treaty Organization.

Combined with such unconnected but emotional issues as the controversy over low-flying allied planes in Germany, the dispute could spark latent anti-American sentiment in Western European nations, officials suggest. Several accidents involving U.S. aircraft or U.S. bases caused civilian deaths last year and aroused criticism of NATO training practices and complaints that sovereignty over German territory had been surrendered to allied military forces.

For the moment, neither Western European nations nor the United States profess to see any way out of the dispute, which involves the annual import of about $100 million worth of U.S. meat from animals whose feed contained growth-enhancing hormones. The European Community has banned all imports of meat containing artificial hormones, beginning today, as a measure to satisfy health-conscious consumer groups in their nations.

The United States, however, argues that there is no evidence that the hormones, properly administered, are harmful to humans and that the ban is really a measure devised to restrict competition from American beef farmers. In retaliation, it has announced that it will levy 100% duties on imports of European beef, Danish hams, Italian canned tomatoes and tomato products, French cheese, processed coffee, low-alcohol beverages, fruit juices and pet food. The goods affected are also worth about $100 million annually.

No compromise over the issue had been reached by late Saturday, and the U.S. ambassador to the 12-nation European Community, Alfred H. Kingon, declared: “Nothing has changed. . . . We have been advised by the community that the ban will take effect with the New Year. When we all wake up tomorrow morning both the ban and our retaliation measures will be implemented.”

No new talks between the United States and the community have been scheduled.

If the U.S. retaliatory moves are implemented, community officials say the next step would be to place a 100% duty on other U.S. imports such as corn and honey, although they are still debating how quickly that would be done.

The amount now at issue is only a small fraction of the annual $166-billion trade between the United States and the European Community. But officials worry about any trade restrictions.

From the American perspective, the European ban on hormone-treated meat appears arbitrary and discriminatory. U.S. officials cite European authorities such as Fedesa, representing the veterinary pharmaceutical industry.

“The net result of the administration of hormones is a better quality, lest costly and leaner carcass,” said Fedesa’s report on hormone feed.

But the Europeans reply that, while the ban on hormones may be based on faulty evidence, it is nevertheless what the consumer wants and it applies equally to all European countries as well as to meat exporters such as Australia, Canada and Argentina.

“It is one of the few pieces of law which actually reflects the desires of the European electorate,” said Brian Gardner of the food consultants, Policy Analysis Europe.

And Willy de Clercq, the community’s commissioner for trade, added: “Our political authorities decided that for the health of the population, it was better to have meat without hormones than with. This is a political decision.”

Further, say European officials, the United States had a year to prepare for the ban and should not react as if it were some last-minute decision by the European Community.

As the conservative and pro-American newspaper Frankfurter Allgemeine put it in a front-page commentary: “Washington has known for a year that hormone meat is no longer acceptable to the EC. The U.S. argument that there is no evidence that such meat is a danger to health may be correct, but it is not enough. Other supplying countries are abiding by the rule, so the U.S. is not being discriminated against.”

And the centrist General-Anzeiger of Bonn commented: “What is logical for Brussels is totally illogical for the Americans. The danger is that this petty dispute over hormones could be the start of further trade conflicts that may lead to a full-blown trade war.

“If the responsible politicians do not apply the brakes in time, then it is to be feared that, in the not-too-distant future, economic, financial and military questions will be thrown into the same pot. That, however, would be fatal.”

And the right-of-center Rheinische Post of Duesseldorf declared, “The unfriendly American action toward its most reliable partner is a sign that the U.S. is prepared to question the bond of friendship because of a trifle.

“Washington has not realized, or has forgotten, that one only makes oneself ridiculous with such retaliatory action, especially in this case, where only $90 million are at stake.”

To some American officials, the current meat argument is a forerunner of more serious potential problems looming as 1992 approaches. That is when the Europeans propose to unite their national markets into a single European entity, which the United States fears could turn the Continent into a protectionist Fortress Europe.

As a Brussels-based analyst observed, “The strength of the U.S. reaction (to the meat ban) reflects the sorry state of mutual suspicion into which U.S.-European trade relations have long since fallen.”

European observers worry that a trade war could quickly shift, on the American side, to calls for reductions in the number of U.S. troops stationed in Europe and other dollar reductions in European-oriented defense spending.

Thus most officials here believe that the European Community should not immediately retaliate against the import duties announced by the United States. Instead, they believe, the issue should be taken to the United Nations or some other suitable agency for adjudication.

West German Economics Minister Helmut Haussman said he hoped to relieve the tension in the trade war when he visits Washington in early February. “I will do everything I can to prevent an escalation of these measures and countermeasures,” he said.