Trade war looms as US bans French meat imports

The possibility of a messy transatlantic trade dispute was increased last night when it emerged that the US had suspended all meat imports ­ principally foie gras and salami ­ from France.

This action appeared to be unconnected to a decision by the EU yesterday to ban imports of American eggs and poultry after bird flu spread further to Texas.

The Americans based their action on a US inspection of French meat-processing plants which ended earlier this month. French officials said that the US inspectors had decided that 11 French plants, previously licensed to sell meat in the US, were no longer observing American safety regulations.

The French agriculture ministry said that it rejected the American concerns but had sent a high-level team to Washington to discuss the measures needed to come in line with US food safety legislation.

The European Commission banned US eggs and poultry on public health grounds after a highly infectious form of the bird flu virus was detected. In Asia, at least 22 people have been killed by the virus, which has prompted the slaughter of tens of millions of fowl.

Tensions were already high, because on Monday the EU is expected to impose trade sanctions worth ¤200m (£134m) on the US in a long-running dispute over tax concessions to US exporters. It concerns an 88-year-old law used by American steel producers and other companies to fend off low-priced imports. With no prospect of legislation to amend American law being complete by Monday, the EU is entitled to start applying retaliatory measures already approved by the World Trade Organisation.

Much money is involved in the egg trade. Some 7,210 tons ­ 8.8 million eggs ­ worth ¤20m (£13.5m) a year come from the US, although some of these are for hatching.

The EU ban, which will last initially for one month, also affects imports of live chicks of which 452,000 are imported in trade worth ¤2.45m each year. David Byrne, the European Commissioner for health and consumer protection, said: "We want to make sure there's no risk posed by the imports." He added that the measures were "proportionate to the risk this issue presents to the EU".

Avian flu is highly contagious among chicken. Although harmless to consumers of meat, it has been lethal to farmers and other humans in regular contact with infected birds. The EU imposed a ban on all imports of Thai poultry earlier this year.

Dr Dan Sheesley, the senior official dealing with animal health at the US mission to the EU, said: "The swift and significant action taken by the US state and federal authorities should, very quickly, contain and eliminate the disease outbreak."

An EU diplomat said: "This is not mainly a trade issue but a public health one. What matters is what happens in the next few weeks. Providing the mechanism is found for reviewing this, then it stays as an isolated veterinary-driven curiosity."