Farm Groups 'Deeply Troubled' Over Carousel Neglect

August 22, 2000

Two major farm organizations have told the White House they are "deeply troubled" that provisions mandating a new round of retaliation against the European Union have not been implemented even though the mandate was included in legislation signed into law two months ago.

George Hall, president, National Cattlemen's Beef Association, and Bob Stallman, president, American Farm Bureau Federation, told White House Chief of Staff John D. Podesta that it had been understood a new list of EU product subject to retaliation would be announced by June 19.

"When the Office of the U.S. trade representative announced on May 26 procedures for modifying the current beef and banana retaliation lists, it indicated that the administration's goal was to announce modifications by June 19, 2000. We are now two months beyond that date," they told Podesta.

"We believe that continued delays in the implementation of this provision have powerful implications for the seriousness our nation attaches to the enforcement of trade agreements," they added. Both Hall and Stallman asked to meet with Podesta later this week unless the modified retaliation lists were issued before a meeting could be set up.

The Africa and Caribbean Basin Growth and Opportunity Act included the "carousel" retaliation provision that requires the administration to rotate the list of imported items that face prohibitive duties (currently 100%) as a result of the EUs failure to comply with World Trade Organization (WTO) findings in the beef hormone case.

"Mandatory carousel retaliation is an important tool for resolving trade disputes," said AMI President J. Patrick Boyle at the time the bill was signed. "EU intransigence in the beef hormone case suggests static retaliation is not effective. Carousel retaliation will, over time, ensure that all EU-member countries pay the price for Europe's refusal to abide by the WTO ruling."

WTO rulings have held that EU restrictions on imports of hormone-treated beef and bananas are illegal, but the EU has refused to rescind or modify these policies. As a result of the EU. s refusal to comply with a WTO ruling against its ban on hormone-treated beef, the United States last year imposed punitive duties on $117 million of EU exports. Under the legislation, USTR will be required to select a revised list of products targeting new EU countries for retaliatory tariffs affecting $117 million in U.S. imports of EU products.

The first rotation of the retaliation lists was to occur within 30 days of enactment of the law. Subsequent rotations were to take place every six months.