-Caveat Lector-

 Thursday, June 3, 1999 Published at 13:10 GMT 14:10 UK
WTO approves US sanctions

WTO approves US sanctions
The World Trade Organisation (WTO) has approved an American request to impose
sanctions on the European Union in response to its ban on hormone-treated
beef.

 But a meeting of the WTO dispute settlement body also agreed to a European
request for a neutral arbitration panel to study the amount due to the US and
Canada.

This panel will report back in the middle of July, so delaying the
implementation of sanctions.




Under its rules the WTO was compelled to agree to both requests.

Ian Wilkinson, deputy head of the EU trade mission, said: "We think (the
sanctions) exceeds by a long way any legitimate loss."

The US wants to impose 100% duties against $202m worth of imports from the
EU, the amount of trade it says it has lost because of the 11-year-old ban.

Cancer risk

The EU says the true damage caused by its ban on imports of beef from cattle
treated with hormones is less than half the amount Washington claims.

Long-running efforts to reach a compromise between the two sides have failed.

While the Americans say there is no health risk, the EU maintains that some
of the hormones may cause cancer.

It is conducting further scientific studies on their safety. Meanwhile, it
has refused to lift the ban, even though the WTO has ruled it is illegal.

Chewing gum

Canada also plans sanctions on trade worth $51m, the amount it claims to have
lost as a result of the ban on exports to European Union countries of its
hormone-treated beef.

The WTO will rule on both sanctions requests seperately.

Washington has not yet named the final products, but a preliminary list
included canned hams, pork, beef and poultry, various tomato products,
Roquefort cheese, truffles, onions, chestnuts, paprika, goose liver, chewing
gum, chocolate and mineral water.

Rita Hayes, the US ambassador to the WTO, said: "The final list of sanctions
will not be drawn up until we receive WTO authorisation."

Hormones are widely used in US agriculture, with more than 90% of American
cattle producers feeding them to their cattle to make them grow faster and
bigger.

In 1989 the US promised to export only hormone-free beef to Europe because of
the EU's ban.

However earlier this year EU experts discovered that some of the US beef
labelled 'hormone-free' did in fact contain banned growth hormones.

A similar set of sanctions from the US on European exports has already been
imposed as a result of another long-running trade dispute, over banana
quotas.

The failure to reach a compromise is a further blow to the leaderless WTO,
which was set up with the aim of smoothing out global trade disputes without
the need for tit-for-tat sanctions.



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