Britain only EU state to avoid US sanctions

BRITAIN ESCAPED US trade sanctions last night, as Washington outlined $116.8m (pounds 70m) of tariffs hitting every other EU country in a dispute over hormone-treated beef.

UK produce was conspicuously absent from a US list of European goods, including chocolate, ham and yarn, which will face 100 per cent import tariffs if exported to the US from 29 July. The fact that Britain is the only EU country that will not be affected is certain to cause consternation among other member states.

One senior British source last night claimed the move was the consequence of British diplomacy and the constructive role of the Foreign Secretary, Robin Cook, in trying to solve the trade impasse. "We are seen in Washington as being on the side of the angels," he said.

The Government also believes that the outcry over earlier threats to apply tariffs to cashmere in a separate row over EU banana import quotas may have caused Washington to be more cautious about penalising the UK.

The list of sanctions published yesterday by the US Trade Representative covers produce from all other EU member states: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden. It includes pork products, Roquefort cheese, truffles, prepared goose liver and mustard.

The beef dispute revolves around the EU's ban on meat from cattle treated with hormones to stimulate growth, a widespread practice in the US and Canada. The US threatened sanctions after the EU failed in May to lift its import embargo, as was required by a previous World Trade Organisation (WTO) ruling.

Europe has banned hormone-treated beef on health grounds but Brussels has failed to produce the necessary scientific evidence - which will now not be completed until the end of the year. The EU argues that its case for maintaining the ban, which has strong support among member states, was boosted by a preliminary scientific report in May. That claimed one of the six growth-promoting hormones widely used in the US cattle industry could cause cancer.

American officials have dismissed the report's findings as inconclusive, saying scientific research for decades has failed to find any health risk associated with growth hormones.

However, the EU has already accepted in principle that it should offer compensation because it has failed to abide by WTO procedures.

Yesterday's decision by the US to outline its list of sanctions appears to dash hopes that it will accept compensation by way of increased access to the EU market for other produce.

Sir Leon Brittan, the acting European Union trade commissioner, said that compensation would "be better for all parties", including US consumers and producers in the EU and the US. "I believe compensation is a more constructive approach,"he said.

The dispute over beef hormones is the latest in a series of transatlantic trade storms, which blew up over complaints about the EU's banana import regime. That row revolved around the favoured status, granted by Europe under an international treaty, to banana imports from Africa, the Caribbean and Pacific areas, most of which are former European colonies.

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