CATTLEMEN URGE PRESIDENT TO RETALIATE AGAINST ILLEGAL EUROPEAN TRADE POLICY

WASHINGTON, D.C. (December 18, 1998) – The President must remain firm in the U.S. pledge to impose retaliatory action against the European Union (EU) if it continues illegal trade practices that have restricted imports of beef and bananas, the National Cattlemen's Beef Association (NCBA) said today.

NCBA and other members of an agricultural coalition today urged the President to action in a letter on the first day of the U.S.-EU Summit meeting on trade and economics. The American Farm Bureau Federation, the American Meat Institute, Chiquita Brands International, and the Hawaii Banana Industry Association joined NCBA to say retaliation is appropriate and necessary in light of the EU’s refusal to bring its trade policy into conformity with international trade rules.

Although the EU has lost numerous cases involving beef and bananas at the World Trade Organization (WTO) and under the General Agreement on Tariffs and Trade (GATT), Europe has blocked all efforts to change its trade policy on these products.

"If the EU will not implement an equitable, WTO-consistent solution to the banana conflict, retaliatory action is appropriate and consistent with international trade law," the groups said. "The EU’s actions on bananas – and on beef – make a mockery of the WTO agreement and undermine the rule of law upon which the global trading system is based. If the EU succeeds in its attempt to evade its obligations, the WTO system will not have worked as promised or intended."

The Administration has announced plans to impose retaliatory tariffs on certain European imports if the EU continues to ignore World Trade Organization rulings against it. NCBA is closely watching the banana case, in which the EU must comply with WTO rulings by January 1999. The banana case will set a precedent for the upcoming resolution of the beef case. The EU has blocked the majority of U.S. beef exports for over 10 years, but the WTO has ruled that the EU must drop its ban against U.S. beef by May 1999.

-- NCBA --

Initiated in 1898, NCBA is the marketing organization and trade association for America’s one million cattle farmers and ranchers. With offices in Denver, Chicago and Washington D.C., NCBA is a consumer-focused, producer-directed organization representing the largest segment of the nation’s food and fiber industry.

Note to editors: A copy of the letter is attached.

December 18, 1998

The Honorable William Jefferson Clinton
President of the United States
The White House
Washington, D.C. 20500

Dear Mr. President:

In anticipation of today’s summit meeting with the European Union (EU), we are writing to reiterate our strong support for your Administration’s plans to impose retaliatory measures against the EU for its continued illegal trade practices regarding banana imports. The U.S. government’s response in this first case will set the precedent for pending trade disputes with the EU over beef and numerous other U.S. agricultural exports.

This issue is critical to American agricultural and trade interests. As the banana dispute goes, so too will similar disputes over beef, fruit, dairy products and other commodities. Billions of dollars in U.S. agricultural exports are in jeopardy. If the EU continues to flaunt the rules, other countries will do the same without fear of being held accountable. Non-compliance with World Trade Organization (WTO) rulings will inevitably become the norm. This "domino effect" could seriously harm other U.S. traded goods, services and intellectual property. Because of our reliance on trade, the economic well being of American businesses, farmers and workers is at stake.

A trading system in which the parties can pick and choose which trade rules they will obey and which they will ignore is no system at all. This is a trade battle that must be fought and won.

The United States has litigated disputes with Europe over bananas and beef. We won these precedent-setting cases. But the EU has been playing a dangerous game with the WTO dispute settlement process. Instead of abiding by WTO findings, Europe is ignoring the decisions against it. In the meantime, U.S. agricultural interests continue to be blocked and injured.

If the EU will not implement an equitable, WTO-consistent solution to the banana conflict, retaliatory action is appropriate and consistent with international trade law. The banana dispute alone has been going on for more than six years. It has been litigated and examined more than any other trade case in history -- twice in the GATT and again in the WTO, including the Appellate Body -- and in each decision, the EU has lost. Now, having taken the full 15-month period allowed for compliance, the EU has adopted cosmetic changes that actually make the policy more WTO-inconsistent and could inflict greater harm on U.S. and Latin American interests.

Belatedly, the EU now is offering to call for a WTO panel to review its so-called "new" banana policy, but such a review would not be completed until after the United States’ legal right to retaliate has expired. Under the EU’s latest offer, if the United States or any other country wanted to challenge the legitimacy of Europe’s "reformed" banana policy, an entirely new dispute settlement procedure would have to be initiated. That would mean three more years of litigation, followed by 15 more months for compliance, and no guarantee of relief for the winning party. As U.S. Trade Representative Charlene Barshefsky stated on October 22, 1998, the EU’s stalling and evasion is intended to create "an endless loop of litigation."

In 1994, the United States agreed to join the WTO after your Administration assured Congress that the organization would have the authority to enforce trade laws and stop illegal practices by foreign countries. This was one of the most important accomplishments of your presidency. However, now the EU’s actions on bananas -- and on beef -- make a mockery of the WTO agreement and undermine the rule of law upon which the global trading system is based. If the EU succeeds in its attempt to evade its obligations, the WTO system will not have worked as promised or intended.

The world has always looked to the United States for leadership in trade matters. Our country has a proud history of initiating nearly every major trade liberalizing agreement during the past 50 years. By insisting that major trading partners play by the rules, the United States will demonstrate that it has faith in the integrity and effectiveness of a global trading system it helped create -- and that it is willing to fight to preserve that system.

On behalf of the American agriculture community representing farmers, ranchers, businesses, exporters and consumers, we urge you to insist that the European Union live up to its obligations under the WTO rulings on bananas and beef. If not, the United States will have no choice but to impose severe retaliatory measures against European products.

Sincerely,

American Farm Bureau Federation
American Meat Institute
Chiquita Brands International
Hawaii Banana Industry Association
National Cattlemen’s Beef Association