U.S. Ready to Slap EU With $202 Million in Sanctions in Beef Dispute

The battle over bananas has been eclipsed by the beef over beef: In the latest trade flare-up between the world’s leading economies, U.S. officials Friday formally declared their plan to impose $202 million in sanctions against Europe for its ban on American beef treated with growth hormones.

The U.S. announcement came 24 hours after European officials declined to meet Thursday’s deadline, set by the World Trade Organization, for ending the decade-old ban. The United States now intends to slap punitive 100% taxes on a range of European products as early as mid-June but more probably in July, officials said.

“We take this course as a last resort,” said U.S. Trade Representative Charlene Barshefsky.

As part of a compromise to head off sanctions, Barshefsky said the U.S. would consider putting hormone labels on beef sold in Europe.

“We remain open to a negotiated solution--as we were in bananas--but we will absolutely protect our rights, and we will without question retaliate if the EU persists in disregarding our views,” Barshefsky told reporters Friday.

The United States will cull its hit list of items targeted for sanctions from a larger, previously released list of European products that included beef, pork, poultry, mustard, yarn, soup, grape juice and dozens of other products. The items would effectively be knocked out of the U.S. market as too expensive.

The escalation of the beef dispute comes just a month after U.S. officials declared $191 million in sanctions on European products, in retaliation for Europe’s trade barriers to bananas marketed by such American firms as Chiquita and Dole.

European officials have said they will modify but not eliminate their preferences for bananas from their former colonies.

European officials have repeatedly cited health concerns as a reason for blocking the hormone-treated beef. Just last week they released a report alleging that growth hormones posed risks of cancer, birth defects and abnormal growth. The U.S. side cites a broad array of contrary scientific evidence.

The European Union pointedly noted Friday that the United States had scaled down its claim of damages to American industry from a previous estimate of $950 million, and suggested it would ask world trade arbiters in Geneva to look at the validity of the $202-million U.S. claim.

“It is now for the WTO to establish the appropriate level of compensation,” said Hugo Paemen, the European Union’s ambassador to the United States. “The EU will abide by the WTO decision.”

If Europe requests the review, the U.S. sanctions would take effect around July 12; otherwise, they would begin next month. Barshefsky asserted that the WTO panel would not change the $202-million figure by more than 10%.

Europe has banned hormone-treated beef, which is sold routinely in U.S. groceries, for a decade, despite a series of unfavorable rulings ending in a WTO finding last year that the prohibition was illegal and not grounded in scientific evidence.

“All U.S. cattle producers are asking for is access to the EU market,” said the National Cattlemen’s Beef Assn. in a statement earlier this week. “European consumers should have the opportunity to choose whatever food products they want, just as American consumers have the opportunity every day to purchase European goods.”

In both the banana and beef cases, American officials have complained that their European counterparts have failed to comply with international rulings.