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U.S., EU Fight Over Beef Ban

Trade official says U.S. would shift sanctions to new European goods to pressure the 27-nation EU to comply with WTO rulings against its ban on beef treated with hormones.

GENEVA (AP) -- The United States announced changes Thursday to trade sanctions it applies on European goods, prompting Brussels to accuse Washington of escalating a 13-year-old beef dispute and threaten new legal action.

Outgoing U.S. Trade Representative Susan Schwab said in a statement that the U.S. would shift sanctions to new European goods to pressure the 27-nation EU to comply with World Trade Organization rulings against its ban on beef treated with hormones.

The U.S. will continue to charge higher import fees on many targeted goods such as Roquefort cheese and truffles. It has now added dozens of new products from pork, poultry and beef cuts to types of oats, sausages, mineral water and chewing gum.

In exchange it has dropped some types of onions, carrots, Dijon mustard and other products.

"For over a decade, we have been trying to resolve this dispute with the EU, but our efforts have gone nowhere," Schwab said. "The existing duties have been in place for over nine years; the goal of these modifications is to reach a resolution of the dispute under which the EU would allow market access for U.S. beef and the United States could end its trade action."

The European Union -- all of which except Britain would be affected by the new sanctions -- immediately threatened to launch a new complaint at the WTO. The EU said the new policy would allow the U.S. to attack new European goods every six months with extra import taxes rising to as high as 100 percent.

Brussels said that would create increased uncertainty for European manufacturers whose products could now be heavily taxed at short notice. It said the U.S. is only authorized to attach the duties on a "fixed list of goods."

"Trans-Atlantic trade needs champions, not sanctions," EU Trade Commissioner Catherine Ashton said. "A large number of EU exporters will be hit by these illegal sanctions."

In a parting shot at Schwab -- who leaves her post when U.S. President-elect Barack Obama takes office Tuesday -- Ashton added: "We look forward to working with the new administration to address this situation."

The EU says beef treated with certain hormones poses a risk to human health. For other hormones, it has argued that a "precautionary principle" ought to be respected because scientific tests cannot yet prove their safety.

But Canada and the U.S. persuaded the WTO that there is no solid scientific evidence to support a ban. In 1999, the global commerce body authorized the United States and Canada to impose $125 million worth of duties a year on European goods.

Brussels challenged those sanctions last year, but a WTO appeals panel found that the U.S. could continue penalizing EU products until the ban is scientifically established.

The EU said, "It is clear this move by the U.S. administration means that we will have no choice but to start preparations in order to take this to the WTO."

"We are convinced the 'carousel' measure is illegal," it added.

U.S. trade spokeswoman Gretchen Hamel rejected that interpretation, saying the U.S. was fully entitled to shift sanctions to new products. "We would also note that the (EU) has in the past several years itself changed lists of products subject to WTO-authorized increased duties," she added.

Trade lawyers said WTO rules on rotating sanctions were still unclear.

"The U.S. position is that they like to rotate sanctions to (affect) as many interests as possible. This is to maximize political pressure on the noncompliant party," said Brendan McGivern, a partner at White & Case law firm in Geneva.

"The U.S. and EU views are clearly divergent," he added. "But no WTO panel has ever said yes or no whether this is allowed."

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