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USTR Announces Revised Trade Action in Beef Hormones Dispute

Washington, D.C. - U.S. Trade Representative Susan C. Schwab announced today that USTR is modifying the list of EU products subject to additional duties in connection with World Trade Organization (WTO) dispute settlement rulings in the EU – Beef Hormones dispute. The modifications, which also help respond to a court-ordered review, make additions to and deletions from the list of the products subject to additional duties, change the EU member States whose products are subject to the duties, and for one product, increase the level of the additional duties.

"In 1998, the WTO found that the EU’s ban on U.S. beef was not supported by science and was thus inconsistent with WTO rules, and in 1999 the United States imposed additional duties on a list of EU products in accordance with a WTO authorization. For over a decade, we have been trying to resolve this dispute with the EU, but our efforts have gone nowhere," explained USTR Schwab. "In these circumstances, I have decided it is time to modify the duties to try to encourage a resolution of this longstanding dispute so as finally to provide a fair outcome to the U.S. beef industry, while addressing the economic impact of such long-standing duties on U.S. interests."

"Particularly in this time of worldwide financial problems, it is important to emphasize that the purpose of the action announced today is not to raise trade barriers, but to lower them," USTR Schwab noted. "The existing duties have been in place for over 9 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."

In 1999, the WTO Dispute Settlement Body authorized the United States to impose increased tariffs on EU products with a total annual trade value of $116.8 million. On October 16, 2008, the WTO Appellate Body confirmed that the United States has a continuing right to impose trade measures until the EU – Beef Hormones dispute is resolved. The modified duties announced today remain within the level authorized by the WTO.

On November 6, 2008, USTR published a Federal Register notice seeking public comments on possible modifications to the list of products subject to additional duties. Approximately 600 comments were received by the requested due date of December 8, 2008. An interagency committee of trade experts and economists reviewed the public comments and provided recommendations to the USTR with respect to modifications that would result in a more effective action, while taking account of effects on the U.S. economy, including consumers.

The details of the modifications to the duties imposed on products of the EU are set out in a Federal Register notice which will be posted today on USTR’s website and which has been sent to the Office of the Federal Register for publication. The effective date of the modifications is March 23, 2009, which will be approximately 60 days from the date of the publication of the notice.

Background:

Beef Hormones Dispute

The EU’s ban on beef from animals administered certain growth-promoting hormones dates back to 1988. The WTO dispute began in January 1996, shortly after the entry into force of the WTO. In 1999, after the United States had successfully challenged the ban in front of a WTO panel and the Appellate Body, the United States obtained authorization from the WTO to suspend concessions and impose additional tariffs on EU products drawn from a list submitted to the WTO. The United States exercised this authorization by raising tariffs on certain European products.

The EU amended its ban in 2003, claiming that the ban now complied with WTO requirements, and challenged the continued application of additional tariffs by the United States. In a report released on October 16, 2008, the WTO Appellate Body rejected the EU’s claim and confirmed that the United States has a continuing right to impose trade measures on EU products.

In addition, the Court of International Trade ordered USTR to conduct a review, by January 14, 2009, of the additional tariffs.