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American Farm Community Launches Effort To Get European Union To Comply With Trade Laws

Monday, November 16, 1998

WASHINGTON, D.C. -- A broad-based agricultural coalition today urged the U.S. government to take action against the European Union (EU) unless the EU brings its illegal trade practices on beef and banana imports into compliance with international trade law. The group emphasized that the credibility of the World Trade Organization (WTO) and the openness of European markets to American exports are at stake.

With the EU attempting to circumvent WTO rulings against its trade practices on beef and bananas, the American Farm Bureau Federation, the American Meat Institute, Chiquita Brands International, the Grocery Manufacturers of America, the Hawaii Banana Industry Association and the National Cattlemen’s Beef Association began running advertisements to inform the American public that these trade disputes threaten not only beef and banana exports, but free trade worldwide.

In the banana case, in four separate rulings, the World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, found that the European Union’s policies governing banana imports are discriminatory and ordered the EU to end its illegal practices by January 1, 1999.

In the beef case, the WTO concluded that the EU’s prohibition against imports of American meat produced from animals raised with growth promotants is not based on a scientific risk assessment and is a violation of international trade rules. The EU was ordered to end the ban or provide scientific justification for the prohibition.

“We took our disagreements with the European Union to the GATT and the WTO, and we won. Now, the European Union still refuses to conform to the rules. The time has come for the United States to take whatever action is necessary to stand up for what’s right,” said Dana Hauck, a cattle producer from Kansas and Chairman of the International Markets Committee of the National Cattlemen’s Beef Association. “These disputes aren’t just about beef and bananas; these are precedent-setting test cases that will determine whether or not the WTO works the way it was intended,” stated Mr. Hauck.

The agriculture groups and businesses believe that because these trade disputes have languished without resolution for so long, there is a lack of understanding about how vital these cases are to the WTO trading system.

“The World Trade Organization has determined in two separate cases that the European Union is violating international trade agreements,” said Len Condon, Vice President for International Trade at the American Meat Institute. “Instead of abiding by these rulings, the EU has indicated that it intends to disregard WTO rules and ignore its international trade obligations,” he said. “Ultimately, this puts America’s farmers, ranchers and businesses at serious risk.”

In response to these WTO rulings on beef and bananas, the EU refused to change its beef policy and made its banana policy even more WTO-inconsistent. These changes, according to United States Trade Representative Charlene Barshefsky, obviously fail to bring the EU banana policy into compliance with international law. The EU response to the criticism has been to declare that if the United States wants to challenge the legality of the EU’s changes, it must file an entirely new WTO case and spend years in new litigation.

“The great danger in these cases is that if the EU’s position is allowed to prevail, no trade disputes will ever be resolved,” said Joseph W. Hagin, Vice President for Corporate Affairs at Chiquita Brands International. “The EU wants to create an endless loop that would permit any country that loses a WTO case to simply make cosmetic changes and declare it is abiding by the law. That’s like saying the losing defendant gets to determine, and thereby avoid, any punishment. The WTO was not designed to be a toothless organization, but that’s what it will be if the EU gets its way.”

Additional Contacts:
Julie Jo Bousman, National Cattlemen's Beef Association, 202/347-0228
Joseph W. Haigin, Chiquita Brands International, 513/784-8866

For more information contact:
Janet Riley
Vice President, Public Affairs
James Ratchford
Manager, Public Affairs

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