U.S. hits EU with revised sanctions in beef dispute

WASHINGTON (Reuters) - The outgoing Bush administration on Thursday cranked up pressure on the European Union to drop its ban on beef from U.S. cattle treated with growth hormones by changing the list of $116.8 million worth of European food products hit with sanctions in the dispute.

The EU reacted angrily to the move, vowing to challenge it at the World Trade Organization.

“For over a decade, we have been trying to resolve this dispute with the EU but our efforts have gone nowhere,” U.S. Trade Representative Susan Schwab said in a statement.

“In these circumstances, I have decided it is time to modify the duties to try to encourage a resolution of this longstanding dispute so as finally to provide a fair outcome to the U.S. beef industry, while addressing the economic impact of such long-standing duties on U.S. interests.”

The EU called the move illegal and said it feared the action could lead to the United States changing its sanctions list every six months.

“Transatlantic trade needs champions, not sanctions,” EU Trade Commissioner Catherine Ashton said in a statement. “This action is most regrettable in the view of many attempts by the EU to find a solution to the long-standing dispute over hormone-treated beef.

“A large number of EU exporters will be hit with these illegal sanctions. We look forward to working with the new administration to address this situation.”

The U.S. Trade Representative’s office said on October 31 it was considering changing the decade-old retaliation list.

The United States imposed the duties after winning a World Trade Organization case in the late 1990s in which it argued the European Union’s ban on beef from cattle treated with artificial growth hormones was not supported by science and inconsistent with WTO rules.

The EU amended its ban in 2003 and filed another case challenging the continued application of the retaliatory tariffs. The WTO appellate body issued a decision in October that the United States says upheld its continuing right to impose trade measures on EU products.

The European Commission, which oversees the bloc’s trade policy, said its decision to ban U.S. hormone-treated beef was based on scientific advice and not protectionism.

Earlier in the long-running case, U.S. cattle producers had pushed the trade representative’s office to take a “carousel” approach to the trade duties, under which the list of EU goods hit with retaliatory sanctions would be changed every six months to maximize pressure on Brussels to lift the ban.

U.S. officials rejected that approach at time. The idea of changing the sanctions list re-emerged only recently.