Only weeks after they resolved their differences over banana imports the United States and the European Union appear poised for another damaging trade war - over US beef imports. This week, despite the threat of US trade sanctions, the European Commission retained its 11-year ban on meat treated with growth-promoting hormones. Citing the latest scientific evidence identifying health risk from hormones, the Commission said "there can no longer be any question of lifting the ban". In an escalation of the dispute, the EU has also announced a ban, from next month, on imports of hormone-free beef from the US after samples were found to have been treated with hormones.
There is, however, the strong sense that the EU is rowing upstream. The World Trade Organisation (WTO) ruled last year that its hormone ban violated multilateral trading rules as the scientific case against hormones is, in its view, un-proven. The Union has until next Thursday to comply with the ruling. Should there be no movement in its position, Washington could get clearance from the WTO to impose sanctions on a broad range of EU exports.
Already, the US has prepared a preliminary list which would see 100 per cent tariff on $900 million worth of European imports. The potential implications for Irish exporters are quite serious; by some estimates about £10 million of Irish exports including pork and bacon products, cereals and confectionery, could be affected.
The EU is confident it can assemble the scientific evidence required to overturn the WTO ruling but this, apparently, will not be available for some time until further studies are completed. As things stand, the EU appears set to continue the fight even though its case is not supported by the WTO. From the Brussels perspective, there are uncomfortable parallels here with the banana war where the EU fought the good fight but was eventually forced to back down when the WTO found that its banana import regime discriminated against US exporters.
The EU announced recently that it would move to bring its banana import procedures into compliance with global trade rules. It may be that history could repeat itself - with the EU being forced to climb down after a lengthy and damaging trade battle. It is to be-hoped that next week's diplomatic manoeuvres will yield an acceptable compromise or some resolution; at a time when the first stirrings of recovery are evident, the fragile world economy can ill-afford a full-blown transatlantic trade war.