U.S. to Retaliate Against European Union for Unfair Trade Pactices

Oct 10, 1998

WASHINGTON, D.C. — After continued pressure from members of Congress, including House Agriculture Committee Chairman Bob Smith (R-OR), and in the face of imminent legislation, the U.S. Trade Representative (USTR) announced today that the United States will retaliate, consistent with WTO guidlines, to force the European Union (EU) to comply with WTO panel decisions regarding bananas and beef hormones.

The WTO has determined in two cases that the EU is not in compliance with world trade laws. The WTO determined that the EU regime governing imports of bananas is not in compliance with its obligations and required the EU to bring their rules into compliance by January 2, 1999. Also, the WTO determined that the EU ban on meat from animals treated with hormones is illegal and required the EU to be in compliance by May 14, 1999.

Because the EU has shown no signs of complying with the panel decisions, and its interim policies indicate that it will not bring its rules into line with world trade laws, legislation was introduced yesterday to begin the process of U.S. retaliation. The legislation, authored by Representative Phil Crane (R-IL), and co-sponsored by Smith and other Members of the House Agriculture Committee was withdrawn today after White House Chief-of- Staff Erskine Bowles promised that he would begin the retaliatory process against the EU.

"U.S. agriculture relies on the global marketplace. We must stand up for our farmers and ranchers and take steps to ensure that other countries abide by worldwide trade rules," Smith said. "I'm pleased that the President has committed to enforcing the WTO decisions, and I hope that the EU will soon change their illegal practices."

"American farmers and ranchers can compete with anyone in the world, but they can't compete against foreign governments that set up illegal barriers to trade. That is why the WTO exists and that is why its rules must be enforced," Smith said.

Ten years ago, the EU implemented a ban on imports of red meat from animals treated with growth promoting hormones, cutting off U.S. beef exports to the EU valued at approximately $100 million annually. The meat hormone ban ignores a vast body of scientific evidence that the veterinary drugs in question are safe when used according to good animal husbandry practice. The science has been consistently upheld by the WTO.

Smith represents Oregon's Second Congressional District -- which includes most of eastern, southern and central Oregon -- in the U.S. House of Representatives.