The Office of the U.S. Trade Representative is finalizing a list of
European Union products that could be subject to trade retaliation as
early as July in a long-standing dispute over hormone-raised beef, U.S.
Special Trade Negotiator for agriculture Peter L. Scher said March 15.
Scher spoke to reporters after a Senate Finance Subcommittee on
International Trade hearing on agriculture trade with China and the
European Union.
"We will exercise our rights," he said, affirming USTR's stance that the
EU will face sanctions if it fails to meet a World Trade Organization
deadline for bringing its regime into compliance with its international
obligations.
The USTR has already taken steps to slap $520 million in retaliatory
tariffs on Europe for the EU's banana regime, which was twice ruled
WTO-illegal. Importers of various products are required to post bonds on
certain products to cover potential 100 percent tariffs.
In beef, the WTO Appellate Body in January 1998 confirmed an earlier
ruling by a WTO dispute settlement panel that the decade-old EU policy
of banning hormone-treated beef was illegal under WTO rules. A WTO
arbiter last May ordered the EU to comply with the ruling and lift the
ban by May 13, 1999.
The senators were skeptical.
"My guess is come May 13 we're still talking," subcommittee chairman
Sen. Charles E. Grassley (R-Iowa) said.
Scher reiterated that USTR will seek retaliatory tariffs as soon as 60
days after May 13, as allowed under WTO rules. And he pointed to the
banana case as evidence of the administration's resolve.
"This is not about bananas. This is about rules," he said. "... If we're
willing to go to that mat on bananas, we're certainly willing to go to
the mat on beef."
The EU has expressed interest in a compromise that would require U.S.
beef to be labeled as originating in the United States. But differences
remained over how the labeling was to be done--and the EU asked for more
time for additional studies, a request USTR denied. The special
negotiator said no fewer than 17 EU studies on hormone-treated beef have
already been conducted.
"This has been a ban in search of a justification for 10 years now," he
said.
Biotechnology Key
In a related area, a State Department official testified at the hearing
that the most pressing agricultural trade concern with the EU may be the
broader area of biotechnology, including genetically modified organisms.
"Within a few years, virtually 100 percent of U.S. agricultural
commodity exports will be genetically modified or mixed with GMO
products," he said. "... We of course respect the EU's right to have a
system of government oversight for GMOs. No government can abdicate its
responsibility to have a system in place to ensure the safety of food,
feed, and the environment. But the system must be predictable,
transparent, efficient, and scientifically based--and in the case of the
EU, it is none of the above."
A significant problem is the negative public perception of biotechnology
in Europe, due to media misinformation, he said. "This has so slanted
the European public's views on the issue that governments are reluctant
to undertake perfectly appropriate, but politically difficult,
regulatory decisions," Eizenstat said.
The State Department and other agencies are developing a
public-relations campaign for Europe on hormone-treated beef and
biotechnology in general, he said.
Sanctions Bill in Works
In comments to reporters after the hearing, Eizenstat said the Clinton
administration is working with Sens. Richard G. Lugar (R-Ind.),
Christopher J. Dodd (D-Conn.), and Joseph R. Biden Jr. (D-Del) on a
sanctions-reform bill.
"We think it's important to have comprehensive sanctions reform,"
Eizenstat said.
Lugar has introduced bills in the 106th Congress that order the
president to review all unilateral economic sanctions (S. 101) and that
prohibit agricultural products from being included in future sanctions
packages (S. 566). The latter bill mirrors a measure, H.R. 817,
introduced by Rep. Thomas W. Ewing (R-Ill.) in the House.
Eizenstat said the administration is willing to supplement any bill with
executive orders.
By Chad Bowman
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