U.S., Europeans Compromise on Beef Hormones

U.S. and European negotiators agreed Saturday on a procedural compromise designed to head off a new salvo of European tariffs Monday in the escalating trade skirmish over Europe’s ban on hormone-treated American beef.

The plan provides for a 75-day cooling-off period in which a high-level joint U.S.-European task force will try to hammer out a solution that enables the United States to ship to Europe some beef that has not been treated with growth-inducing hormones, while Europe accepts U.S. certification that it meets European standards.

Penalties Slated

The move is designed to show progress before a meeting Monday in Brussels of the European Community Council of Ministers. The council had been slated to slap penalty duties on more U.S. foods following this country’s imposition on Jan. 1 of 100% tariffs on some Economic Community foods in retaliation for the ban on beef.

Although the Europeans refused to say for sure, Economic Community Trade Minister Frans Andriessen indicated that the move probably would be sufficient to persuade the council to refrain from further retaliatory moves. The joint task force is scheduled to meet for the first time in Brussels in about two weeks. It has until about May 1 to resolve the hormones issue.

During the Saturday meeting here, U.S. Trade Representative Carla Anderson Hills also offered a new proposal for resolving a broader U.S.-European agricultural dispute--this one over how sweeping a goal to set for negotiating the reduction of farm subsidies around the globe.

Until now, the United States has insisted that the negotiating mandate for the farm-subsidy talks calls for the total “elimination” of all agricultural subsidies by a specific date--a goal that the Europeans say they cannot endorse and one that has stalled broader global trade negotiations.

On Saturday, however, Hills proposed new language that the Europeans said demanded only a substantial “ratcheting down” of current levels of agricultural subsidies--a proposal that the Europeans said looked promising and might “provide a basis for further discussion.”

U.S. officials insisted that the more vague language is designed only to enable the two sides to get the broader trade liberalization talks moving again and does not mean that Washington is abandoning its push to win agreement eventually to end all farm subsidies.

Nevertheless, the series of concessions marks a significant softening in tone by the United States, which previously had taken a no-compromise position both on the beef hormones dispute and on talks over reducing global farm subsidies. Trade and agriculture ministers from both sides are scheduled to meet in Geneva in March to try to reach a formal compromise.

Postpones Action

The retaliation that the Council of Ministers had been planning for Monday would have imposed 100% tariffs on two U.S. food products--unshelled walnuts and some dried fruits. The Economic Community had been slated to put them in effect on Jan. 20, but had postponed the action until Monday.

Although the scope of the proposed European retaliation was small, trade officials on both sides were fearful that it might start a series of tit-for-tat salvos that quickly could escalate into a full-fledged trade war that could have led to serious damage to both U.S. and European economies.

Officials from both sides of the Atlantic said the basic idea behind Saturday’s compromise was to pave the way legally for the United States to ship some hormone-free beef to Europe and then hope that U.S. producers would tailor production to increase their beef exports to Europe.

The solution the negotiators hope to work out presumably would keep European health standards intact while at the same time allowing the United States to retain its current health certification system, which essentially takes farmers’ say-so on whether hormones are used.

The United States also may expand its labeling of export-bound beef to show whether it was produced with hormones or not. U.S. officials say the growth-inducing hormones used in American beef production are harmless and have dissipated before the animal is slaughtered.

Will Continue Tariffs

Under the compromise, the United States will continue the retaliatory tariffs that it imposed on Jan. 1, even though the Europeans contend that they are illegal. But the tariffs--on a variety of European foods from Danish cheese to Italian tomatoes--will be reduced commensurately as more and more U.S. beef is accepted in Europe.

Both U.S. and European negotiators conceded that the compromise is only procedural and that it will not resolve the two basic--and conflicting--principles that set off the dispute in the first place.

Washington still believes that the hormones used by U.S. producers are healthful, and charges that Brussels is using the hormone ban as a trade barrier. And Brussels insists that European governments have a right to set health standards no matter what other nations think.

Besides Hills and Andriessen, U.S. Agriculture Secretary Clayton K. Yeutter and Common Market Agriculture Minister Ray MacSharry also took part in the talks on agricultural issues.