26 March 1999

US names EU hit list as trade war draws closer

By Philip Clarke

THE stakes were raised in the possible trade war with the US this week when Washington issued a wide-ranging hit list of products it will tax if the EU does not lift its import ban on hormone-treated beef by May 13.

About $900m (£550m) of goods, including pigmeat, beef and poultry, are singled out, with the US threatening to impose 100% import duties if its demands are not met.

US trade representative Charlene Barchefsky said the list was a preliminary action while she waited to see whether the EU would comply with recent WTO rulings. If it goes ahead, that list will be whittled down to about $300m (£183m).

The EU has until May 13 to lift the 10-year ban or come up with fresh evidence showing it is scientifically justified. But last month the commission warned its research would not be completed in time.

Scottish NFU president Jim Walker said the US move was "a cynical attempt to set its own political agenda in advance of the mid-May deadline", which could put jobs at risk.

In reality, however, the UK will escape relatively lightly if the US goes ahead with its threats.

"Last year we only sold 4000t of loin ribs to the US through just one plant, with a total value of £8m," said Meat and Livestock Commission export marketing manager Terry Lee. "Although this is a relatively profitable business for the company concerned, it only represents 2% of our total pigmeat exports.

"We dont send any beef at all because of the export ban, while sheepmeat is not on the hit list."

Mr Lee believed the UK had been let off lightly because the government supports the US position on beef hormones. But he conceded that other EU countries would be more directly affected. Denmark, for example, shipped about 40,000t of pigmeat to the US last year – and this could have knock-on effects for the UK trading in the single market.

But the view in Brussels is that the US is unlikely to act upon its threats.

Agricultural councillor at the US trade mission, Mary Revelt, told farmers weekly she preferred a negotiated solution. This would probably involve labelling, though an EU idea to compensate the US while it waited for its research results could work in the short term.

The US has so far offered to include "US Department of Agriculture approved" on any labels. But the EU says labels should state whether the beef has been hormone treated.

"We are willing to talk about the details, but anything with a skull and crossbones is not on the ball park," said Mrs Revelt.

The NFUs also see labelling as a viable option, but there is concern that, if the import ban is lifted, UK producers could be at a competitive disadvantage, due to the cost advantages of using hormones.

But leading retailers said this week that if the ban is lifted they would not sell hormone-treated beef.