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US declares war on cough drops

THE UNITED States plans to punish British companies making cough drops, raspberry jam and chocolates, as the trade war over Europe's refusal to import American hormone-treated beef reopens today .

The World Trade Organisation has given the European Union a deadline of today to lift its 10-year-old ban on the imports. But the EU has said it will still refuse to allow them. It is worried that hormone residues in the meat could cause cancer and affect growing children.

In response, the US has threatened swingeing duties and punitive damages totalling more than a billion dollars.

Peter Scher, special US negotiator for agricultural trade, said "there is still time" for the two sides to work out a labelling solution to show the meat had been treated with hormones. Plans for the labelling system collapsed because the US felt it would discriminate against its products. "You might as well have a skull and crossbones on the packet," said one source.

In Brussels, the acting EU Trade Commissioner Sir Leon Brittan said he would propose compensating the United States for lost beef sales in order to avoid retaliation.