USTR PUBLISHES PRELIMINARY LIST OF PRODUCTS IN PREPARATION TO EXERCISE WTO
RIGHTS ON BEEF TRADE ISSUE

                                
                                
                                
        OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
               Executive Office of the President
                       Washington, D.C.  
                             20508


USTR Press Releases are available on the USTR home page at WWW.USTR.GOV.  
They are also available through the USTR Fax Retrieval System at 202-395-4809.



                                                   99 - 27 
embargoed for release until 1:00 p.m.   Contact:  Jay Ziegler
Sunday, March 22, 1999                            Helaine Klasky
                                                  Amy Stilwell
                                                  (202) 395-3230


           USTR PUBLISHES PRELIMINARY LIST OF PRODUCTS
    IN PREPARATION TO EXERCISE WTO RIGHTS ON BEEF TRADE ISSUE

The Office of the United States Trade Representative today announced
preliminary actions in response to on-going uncertainty about whether the
European Union (EU) will comply with WTO rulings which call for it to end its
ban on imports of U.S. beef from animals treated with any of six
scientifically-proven safe hormones.  The Office of the U.S. Trade
Representative outlined a preliminary list of products which would be subject
to prohibitive tariffs if the EU does not comply by the WTO-mandated deadline
of May 13, 1999.

Under WTO rules, the United States is supposed to seek authorization to
suspend concessions within 30 days after May 13, 1999.   U.S. law requires
adequate notice and comment of such action.  The final list of products that
could be affected by possible suspension of concessions will be drawn from the
preliminary list.  

"The EU's ten-year, arbitrary, and scientifically unjustified ban on U.S. beef
has had a substantial negative impact on U.S. beef producers," said United
States Trade Representative Charlene Barshefsky.   "Our hope is that we can
reach a mutually acceptable solution with the EU that provides access for U.S.
beef producers in Europe consistent with WTO rules.  At the same time, we must
also begin preparations to protect our rights if the EU does not comply with
its obligations.  The publication of this preliminary list is fully consistent
with WTO rules, and reflects the transparency of the U.S. process.  We will
continue to abide by the WTO schedule as we prepare to exercise our WTO
rights."                                          
"We would like to resolve this issue with the EU," Secretary of Agriculture
Dan Glickman noted,  "and we have offered a proposal to do just that.  But if
a reasonable solution cannot be agreed to, we are prepared to protect our
rights."



Background

The safety of consuming beef from cattle treated with certain hormones has
been thoroughly researched since the 1950s.  On all occasions of FDA testing,
the six hormones subject to this trade dispute have always been found to be
safe.  The clear international scientific consensus is that these approved and
licensed products are safe when used in accordance with good veterinary
practices.  Even the EU's own scientists have agreed with these findings.  At
present, U.S. beef is shipped to 138 countries.

The origin of this trade dispute is nearly two decades old and began in 1980
with the EU's  debate on the use of natural and synthetic hormones in
livestock.  In December 1985, the EU adopted a directive on livestock
production restricting the use of natural hormones to therapeutic purposes,
banning the use of synthetic hormones, and prohibiting imports of animals, and
meat from animals, to which hormones had been administered.  That directive
was later declared invalid by the European Court of Justice on procedural
grounds and had to be re-adopted by the Council, unchanged, in 1988 ("the
Hormone Directive").  These measures became effective January 1, 1989,
notwithstanding U.S. attempts to resolve this issue bilaterally and
multilaterally, including through dispute settlement under the General
Agreement on Tariffs and Trade (GATT). 
On December 24, 1987, the President of the United States announced an increase
in duties on selected European products in response to the Hormone Directive
and related measures, but immediately suspended this action to promote a
negotiated solution of the issue.  The USTR enacted the increase in duties in
January 1989 when the EU began implementing the hormone ban against imports
from the United States.  The USTR subsequently modified the application of
increased duties on a number of occasions.   During the early 1990s, the
United States continued to encourage resolution of this dispute and worked in
the FAO/WHO Codex Alimentarius to develop principles that reenforce the pre-
eminent role of science in establishing high food safety standards.

Following entry into force of the WTO Agreement on the Application of Sanitary
and Phytosanitary Measures ("SPS Agreement") on January 1, 1995, the United
States and, later, Canada, proceeded with formal WTO dispute settlement
procedures against the hormone ban.  On May 20, 1996, the DSB established a
dispute settlement panel ("the WTO panel") to examine the consistency of the
EU's hormone ban with the its WTO obligations.  (Prior to the establishment of
the WTO panel, the EU replaced the Hormone Directive with another directive
that re-codified and expanded the hormone ban.)

On August 18, 1997, the WTO panel issued its report finding that the hormone
ban is not based on scientific evidence, a risk assessment, or relevant
international standards in contravention of the EU's obligations under the SPS
Agreement.   The Appellate Body issued its report on January 16, 1998
affirming that the hormone ban is not consistent with the EU's obligations
under the SPS Agreement.  At its February 13, 1998 meeting, the DSB adopted
the Panel and Appellate Body reports on hormones.  The EU subsequently
requested four years to implement the DSB recommendations and rulings, two
years to conduct additional risk assessments and two years to revise its
measures to reflect the results of those risk assessments.  The WTO Arbitrator
appointed to determine the reasonable period of time observed that the
compliance period should not be used to "demonstrate the consistency of a
measure already judged to be inconsistent," in response to the EU's arguments
that it would need a substantial period of time to conduct additional risk
assessments.   The Arbitrator determined that the reasonable period of time
for implementation was fifteen months and would expire on May 13, 1999.  

To date, the EU has taken no action to implement the DSB recommendations and
rulings.  The EU has made no modifications to the hormone ban, but rather
initiated seventeen new risk assessments.  In its status report for the March
meeting of the WTO Dispute Settlement Body, the EU indicated that it does not
expect to be in compliance by the May 13, 1999 WTO-mandated deadline.

On March 3-4, 1999, U.S. and EU officials held discussions in Washington to
explore options to resolve this dispute.  The United States presented a
proposal for labeling U.S. beef as a way to address European consumers'
concerns.  However, the EU indicated that a resolution of this matter would be
conditional on the completion of the additional risk assessments, which may
not be completed until sometime in late 1999 or 2000, and other bureaucratic
hurdles in the EU.  Resolution of this issue depends on overcoming uncertain
and lengthy procedural hurdles, and addressing the substantive requirements of
the WTO hormones decisions. 


                             - 30  -                           PRODUCT LIST

Increased duties of 100 percent ad valorem may be applied to articles that are
classified in the headings and the subheadings of the Harmonized Tariff
Schedule of the United States (HTS) listed below and that are products of the
member States of the European Union.  In the instances where a 4-digit HTS
heading appears in the left column of this list, products classified in any of
the 8-digit subheadings appearing in the HTS under those 4-digit headings may
be subject to increased duties.  The product descriptions in this press
release are for information purposes only; they are not intended to delimit in
any way the scope of the products that would be subject to increased duties.
     

HTS
Description


0201
 MEAT OF BOVINE ANIMALS, FRESH OR CHILLED


0202
 MEAT OF BOVINE ANIMALS, FROZEN


0203
 MEAT OF SWINE (PORK), FRESH, CHILLED OR FROZEN


0206
EDIBLE OFFAL OF BOVINE ANIMALS, SWINE, SHEEP, GOATS, HORSES ETC.,
FRESH, CHILLED OR FROZEN


0207
 MEAT AND EDIBLE OFFAL OF POULTRY (CHICKENS, DUCKS, GEESE, TURKEYS
AND GUINEAS), FRESH, CHILLED OR FROZEN


0210110
0
Hams, shoulders and cuts thereof with bone in, salted, in brine,
dried or smoked


0210120
0
Bellies (streaky) and cuts thereof of swine, salted, in brine,
dried or smoked


0210200
0
Meat of bovine animals, salted, in brine, dried or smoked


0210902
0
Meat and edible offal of chickens, ducks, geese, turkeys and
guineas, salted, in brine, dried or smoked; flour and meal of
these animals


0210904
0
Meat and edible offal nesoi, salted, in brine, dried or smoked;
flour and meal, nesoi


0406402
0
Roquefort cheese in original loaves, not grated or powdered, not
processed


0406404
0
Roquefort cheese, other than in original loaves, not grated or
powdered, not processed


0504000
0
Guts, bladders and stomachs of animals (other than fish), whole
and pieces thereof


0603900
0
Cut flowers and flower buds, suitable for bouquets or ornamental
purposes, dried, dyed, bleached, impregnated or otherwise prepared


0604910
0
Foliage, branches and other parts of plants without flowers or
flower buds, and grasses, suitable for bouquets or ornamental
purposes, fresh


0604993
0
Foliage, branches, parts of plants without flowers or buds, and
grasses, suitable for bouquets or ornamental purposes, dried or
bleached


0702002
0
Tomatoes, fresh or chilled, entered during Mar.1 to July 14, or
the period Sept.1 to Nov.14 in any year


0702004
0
Tomatoes, fresh or chilled, entered during July 15 to Aug.31 in
any year


0702006
0
Tomatoes, fresh or chilled, entered from Nov. 15 thru the last day
of Feb. of the following year


0703104
0
Onions, other than onion sets or pearl onions not over 16 mm in
diameter, and shallots, fresh or chilled


0709520
0
Truffles, fresh or chilled


0712901
0
Dried carrots, whole, cut, sliced, broken or in powder, but not
further prepared


0712907
4
Dried tomatoes, in powder


0712907
5
Dried tomatoes, whole, cut, sliced, broken or in powder, but not
further prepared


0712907
8
Dried tomatoes, whole, cut, sliced or broken but not further
prepared


0802400
0
Chestnuts, fresh or dried, shelled or in shell


0904202
0
Paprika, dried or crushed or ground


1004000
0
Oats


1104120
0
Rolled or flaked grains of oats


1104220
0
Grains of oats, hulled, pearled, clipped, sliced, kibbled or
otherwise worked, but not rolled or flaked


1505900
0
Fatty substances derived from wool grease (including lanolin)


1601
SAUSAGES AND SIMILAR PRODUCTS, OF MEAT, MEAT OFFAL OR BLOOD; FOOD
PREPARATIONS BASED ON THESE PRODUCTS


1602100
0
Homogenized preparations of meat, meat offal or blood, nesoi


1602202
0
Prepared or preserved liver of goose


1602204
0
Prepared or preserved liver of any animal other than of goose


1602310
0
Prepared or preserved meat or meat offal of turkeys, nesoi


1602320
0
Prepared or preserved meat or meat offal of chickens, nesoi


1602390
0
Prepared or preserved meat or meat offal of ducks, geese or
guineas, nesoi


1602411
0
Prepared or preserved pork ham and cuts thereof, containing
cereals or vegetables


1602412
0
Pork hams and cuts thereof, not containing cereals or vegetables,
boned and cooked and packed in airtight containers


1602419
0
Prepared or preserved pork hams and cuts thereof, not containing
cereals or vegetables, nesi


1602422
0
Pork shoulders and cuts thereof, boned and cooked and packed in
airtight containers


1602424
0
Prepared or preserved pork shoulders and cuts thereof, other than
boned and cooked and packed in airtight containers


1602491
0
Prepared or preserved pork offal, including mixtures


1602492
0
Pork other than ham and shoulder and cuts thereof, not containing
cereals or vegetables, boned and cooked and packed in airtight
containers


1602494
0
Prepared or preserved pork, not containing cereals or vegetables,
nesoi


1602496
0
Prepared or preserved pork mixed with beef


1602499
0
Prepared or preserved pork, nesoi


1602500
5
Prepared or preserved offal of bovine animals


1602500
9
Prepared or preserved meat of bovine animals, cured or pickled,
not containing cereals or vegetables


1602501
0
Corned beef in airtight containers


1602502
0
Prepared or preserved beef in airtight containers, other than
corned beef, not containing cereals or vegetables


1602506
0
Prepared or preserved meat of bovine animals, not containing
cereals or vegetables, nesoi


1602509
0
Prepared or preserved meat of bovine animals, containing cereals
or vegetables


1704100
0
Chewing gum, not containing cocoa, whether or not sugar-coated


1704902
5
Sugar confectionary cough drops, not containing cocoa


1806310
0
Chocolate and other cocoa preparations, in blocks, slabs or bars,
filled, not in bulk


1905400
0
Rusks, toasted bread and similar toasted products


2002100
0
Tomatoes, whole or in pieces, prepared or preserved otherwise than
by vinegar or acetic acid


2002900
0
Tomatoes, other than whole or in pieces, prepared or preserved
otherwise than by vinegar or acetic acid


2002904
0
Tomatoes, in powder, prepared or preserved otherwise than by
vinegar or acetic acid


2002908
0
Tomatoes (including paste and puree) prepared or preserved
otherwise than by vinegar or acetic acid, nesoi


2007990
5
Lingonberry and raspberry jams


2008304
2
Satsumas, prepared or preserved, in airtight containers, aggregate
quantity n/o 40,000 metric tons/calandar yr


2008304
6
Satsumas, prepared or preserved, in airtight containers, aggregate
quantity o/40,000 metric tons/calandar yr


2008400
0
Pears, otherwise prepared or preserved, nesoi


2008700
0
Peaches (excluding nectarines), otherwise prepared or preserved,
nesoi


2009600
0
Grape juice (including grape must), concentrated or not
concentrated


2009806
0
Juice of any other single fruit, nesoi, (including cherries and
berries), concentrated or not concentrated


2009904
0
Mixtures of fruit juices, or mixtures of vegetable and fruit
juices, concentrated or not concentrated


2101300
0
Roasted chicory and other roasted coffee substitutes and extracts,
essences and concentrates thereof


2103304
0
Prepared mustard


2104100
0
Soups and broths and preparations therefor


2201100
0
Mineral waters and aerated waters, not containing added sugar or
other sweetening matter nor flavored


2309901
0
Mixed feed or mixed feed ingredients used in animal feeding


3506105
0
Products suitable for use as glues or adhesives, nesoi, not
exceeding 1 kg, put up for retail sale


5504100
0
Artificial staple fibers, not carded, combed or otherwise
processed for spinning, of viscose rayon


5510110
0
Yarn (other than sewing thread) containing 85% or more by weight
of artificial staple fibers, singles, not put up for retail sale


8510200
0
Hair clippers, with self-contained electric motor


8711200
0
Motorcycles (incl. mopeds) and cycles, fitted w/recip. internal-
combustion piston engine w/capacity o/50 but n/o 250 cc


8711300
0
Motorcycles (incl. mopeds) and cycles, fitted w/recip. internal-
combustion piston engine w/capacity o/250 but n/o 500 cc



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