Measures under consideration could lead to imposition of 100% ad valorem tariffs on selected food and agricultural products from specified EU countries

Background

The European Community (EC) imposes bans on imports of beef and beef products from animals to which any of six hormones have been administered for growth promotion purposes. As a result of successful trade litigation commenced by the United States, the World Trade Organization (WTO) Dispute Settlement Body (DSB) in August 1998 issued a ruling determining that the EC beef hormone import ban nullified and impaired U.S. benefits under the WTO Agreements, and in July 1999 authorized the United States to suspend tariff concessions to the EC covering trade in an amount of $116.8 million annually. Pursuant to that authorization, the United States, commencing in July 1999, imposed punitive 100% ad valorem duties on a selected list of food and agricultural products from certain EU countries. Subsequent WTO litigation has upheld the United States’ retaliatory measures.

The current list of products subject to the punitive 100% duties includes products from various individual EU countries and groups of EU countries, including certain categories of beef and pork, cheeses, onions, tomatoes, truffles, carrots, goose livers, toasted breads, single fruit juices, mustard, soups, yarn, chocolate, and other products.

Possible Changes to the Retaliation List

In light of further recent developments in the WTO litigation, in a notice published in the Federal Register on November 6, 2008, the United States Trade Representative (USTR) has proposed to modify and possibly expand the product and country coverage for the 100% tariffs. The purported objective of the proposed modifications is to induce the EU’s compliance with the WTO ruling or otherwise bring about a resolution of the trade dispute.

USTR is considering two broad areas for change. First, USTR is considering whether to remove any products from the current retaliation list and whether to increase the duties for products remaining on the list above 100%. Second, USTR has provided a list of new products for possible inclusion in the retaliation list at tariff rates to be determined, but most likely at least 100%. USTR is also seeking public comments on whether the proposed tariffs should be applied to all or only certain specified EU countries.

The products falling into both categories is listed in an annex to the USTR notice and can be furnished upon request.

Public Comments Due December 8, 2008

Under the relevant statutes, USTR must consider a number of factors in selecting products, countries, and levels of retaliation, including the effectiveness of the measures in achieving compliance, and the effect of such actions on the U.S. economy, small or medium-sized businesses, and consumers.

Companies importing products subject, or potentially subject to the proposed measures are advised to file public comments by the December 8 deadline and to take other appropriate measures to ensure that their interests are protected. Hogan & Hartson’s trade attorneys are prepared to consult with companies concerning such actions and to provide the required legal assistance.