The European Commissioner for Agriculture, Mr Franz Fischler, has condemned the decision of the US to suspend trade concessions to the EU worth some $202 million in retaliation for the union's refusal to lift its ban on hormone-treated beef.
Although the US has yet to list the products against which it will take action, there are fears it will include some Irish pigmeat exports.
Mr Fischler, who reported to farm ministers yesterday on the worsening trade dispute, said he was disappointed that the US had announced its intention to apply for authorisation to the World Trade Organisation for the right to take sanctions following the failure of the EU to comply by the WTO deadline last Thursday.
EU officials concede that the Union is legally in the wrong in defying the WTO ruling and admit that some form of sanction will apply, but they dispute the scale of damage alleged by the US and say they would prefer to pay compensation than see exports hit. They insist, however, on their moral right to apply the precautionary principle in the light of recent scientific evidence and of studies currently under way.
The Commission will tomorrow decide what approach to take to the US but is expected to seek WTO arbitration over the scale of the sanctions and their method of application. Under WTO procedures the process of authorisation and arbitration is supposed to be concluded within 60 days of the EU's failure to comply with the recent WTO panel ruling that its ban on hormone-treated beef was a trade barrier rather than a health measure.
Mr Fischler said yesterday that the EU had recently sent the US a very detailed scientific report which raised doubts about the safety of hormones which were registered for use as growth promoters in the US and Canada and had hoped that the US would take more time to study this before proceeding along the path of trade retaliations.
"The amount of the sanctions proposed - $202 million - whilst it is much less than the very ambitious claims of the US cattle industry, is more than double the amount the US itself had unilaterally applied at an earlier stage in the dispute. We will certainly challenge this sum and the US will have to justify it before a WTO arbitrator."
A spokesman for Mr Fischler, Mr Gerry Kiely, also made it clear yesterday that the EU no longer viewed the option of admitting the beef but then labelling it as hormone-treated as an acceptable solution in the light of the latest "clear" evidence of a potential health hazard. He said they viewed compensation payments to the US as better than trade retaliation. The Minister for Agriculture, Mr Walsh, said he was in broad support of the position taken on the issue by the Commission.
Meanwhile, EU inspectors arrived in the North to check on the security of the Department of Agriculture's much-vaunted computer tracing system for beef.
The revelation that some 19 untraceable animals were improperly sold abroad has prompted fears that the North might again lose access to European markets but Commission sources were playing down the story, pointing out that all 19 had been young enough to be exported under the British date-based exporting scheme.
The inspectors' report should be available within 20 days.
