European-American friendship is getting off to a bumpy new-year start with a two-year dispute over U.S. exports of hormone-treated meat expected to escalate Sunday into a major trade war.
The 12-nation European Community scheduled a ban on imports of beef treated with drug-hormones at midnight Saturday, prompting an immediate American retaliation at 12:01 a.m. EST.The Europeans, especially West Germany, said hormone-treated beef poses a health risk - a contention the U.S. government vehemently denies, saying no scientific proof exists of such hazards.
The dispute, experts said, could cause major disruption in the $150 billion in annual trade across the Atlantic.
"We're on the verge of an international food fight with the EC," said Allen Moore, commerce under secretary for international trade. "We don't know how big that's going to get."
The European ban affects about $100 million in U.S. meat sales and the American retaliation, in the form of 100 percent tariffs on food imports from Europe, also is worth $100 million, according to U.S. Trade Representative Clayton Yeutter.
The American decision will double the wholesale cost of such goods as beef, Danish hams, Italian canned tomatoes, French cheese, processed coffee, low-alcohol beverages, fruit juices and pet food.
The Europeans have said they will quickly retaliate against the American retaliation, and the U.S. government has made it clear it will counter-retaliate.
There has been speculation the Europeans would escalate the dispute by hiking tariffs on honey, walnuts, canned corn and dried fruit. The United States might consider a resulting ban on all European meat imports, valued at $450 million per year, analysts said.
But U.S. officials refuse to spell out specific action they would take in the likely event of a European retaliation.
"We don't want to spend our time drawing up lists of items that are ripe for retaliation," said Cary Walker, a spokesman for the U.S. Trade Representative.
At present, no negotiations are scheduled to end the confrontation, but U.S. officials were careful to use diplomatic language in assessing the dispute.
"The United States is very hopeful we can resolve the issue quickly," said Walker. "The European Community is one of the United States' biggest trading partners and we're certainly eager to resolve the problem."