WASHINGTON (FNS) -- Although trade sanctions that could empty retailers' shelves of European gourmet food items have been put on hold until mid-summer at least, an industry leader has warned the dispute is on the brink of a trade war in which supermarkets, their customers and Western governments all stand to lose.
Timothy Hammonds, president, Food Marketing Institute here, said it's of little solace to retailers that the World Trade Organization last week granted the European Union's request to arbitrate a dispute with the United States on sale of hormone-fed beef. The move delayed until at least July 12 WTO approval for the United States to impose 100% penalty duties on $202 million worth of European gourmet food products.
Arbitration rarely has succeeded in resolving trade disputes since the WTO was formed in 1995. Most recently, the trade body permitted the United States to impose these penalty duties on European imports valued at $191.4 million in a dispute on the EU's banana policies. A number of gourmet food products such as Pecorino cheese and biscuits eventually were dropped from the import "hit list."
In the newest dispute, the United States for years has contended the EU illegally bans the importation of hormone-treated beef. The WTO has ruled several times the Europeans' import ban violates the trade group's regulations, but the EU has appealed each decision and on June 3, having run out of appeals, exercised its authority to request a final arbitration session. Unless an accord is reached by the WTO's July 12 meeting, it could authorize the United States to impose trade sanctions against EU-member nations.
Should the United States receive approval to retaliate against the EU in the beef dispute, the lion's share of products valued at $202 million likely are to be gourmet foods. Virtually all of the preliminary, $900 million hit list, was composed of European foods. These included canned and processed beef, poultry and pork; sausages; pates; Roquefort cheese; chocolates; fresh, chilled, juiced, sauced and preserved fruits and vegetables; soups and broths; various tomato products; onions, truffles, chestnuts, oat cereals; and chewing gum.