How Dangerous are Trade Disputes Between the EU and the US for Transatlantic Relations? :: Trading European Union United States Essays

How Dangerous are Trade Disputes Between the EU and the US for Transatlantic Relations? INTRODUCTION The United States of America and the 15 countries that comprise the European Union are the two largest economies in the world, and possess the world’s biggest bilateral trading and investment relationship. The enormous impact of trade relations between the two continents creates thousands of jobs and wealth on both sides of the Atlantic. These transatlantic flows of trade and investment amount to around $1 billion a day, and jointly, the global trade accounts for almost 40 % of world trade . These staggering figures indicate the incredible synergies that can result from cooperative agreements between countries, but are not always free from the perilous touch of political and national interests. Every relationship has its own pitfalls and troubles, and if not kept in check the trade disagreements that arise between these powerful entities can pose a dangerous threat to the entire relationship. Unfortunately, the disagreements that result can become so heated that a complete trade shutdown of certain items occurs. One such example is the EU/US beef trade dispute. As Michael Paulson of the Seattle Post-Intelligencer notes, as much as 90 % of US beef is produced with the aid of growth hormones and is shipped to 138 countries . The dispute is now in its 14th year after several interesting milestones in the dispute’s history. The Office of the US Trade Representative identifies several important milestones in the case beginning in 1985, when the EU restricted use of hormones to therapeutic purposes only. This was followed by a complete ban in 1989 on meat from animals treated with six growth hormones, effectively ending virtually all importation of American and Canadian beef. In 1996 the US and Canada consulted the World Trade Organization (WTO) about the ban, with the WTO ruling in 1997 that the EU’s beef ban was not based on scientific evidence . Researchers at Kansas State University have verified the WTO’s stand that there is no merit to claims hormone-fed beef is not safe to eat, as long as the hormones are used with generally accepted veterinary principles. American beef producers claim that European producers support the ban because it stifles competition, giving them a competitive edge in their own backyard through trade protectionism. They complain that French farmers are some of the most heavily subsidized in the world, giving them an unfair trade advantage.