U.S. Beef-Export Threat to Europe a Symptom of Deeper Issues

The latest beef between the United States and Europe is over, well, beef. Unless the European union finally lifts a decade-old policy banning the import of U.S. beef, U.S. Trade Representative Charlene Barshefsky announced, the United States will start imposing heavy-duty tariffs on $900 million in European goods, from chocolates to mopeds. The new ultimatum comes on the heels of a banana war between the two continents, in which the U.S. accuses the Europeans of favoring imports from former colonies. On the beef issue, the E.U. nations says the question is health: They're not convinced that hormone-treated U.S. beef is safe in the long term. A World Trade Organization panel, though, has ruled that there is no scientific evidence to support that concern. Whatever the merits of the health issue, says TIME senior economic reporter Bernard Baumohl, the fundamental underlying issue is economic: "Protectionism is rearing its ugly head again."

In these good times in the U.S., it's often difficult to appreciate the economic problems plaguing our trading partners. "About a third of the world, especially in Asia and Latin America, is in recession or teetering on its brink," says Baumohl. The effect is to lessen worldwide demand for a whole host of goods, which accelerates the need to find new markets and increase exports to new partners. This tension is exacerbating frictions between trading partners where barriers stand in the way. "Many in the U.S. suspect that on the beef issue, for example, the Europeans are merely trying to protect their own farmers against cheaper and better U.S. beef," says Baumohl. Given the continued unevenness of the global economy, and Europe's move toward consolidation as a continental marketplace, expect more trade disputes between the U.S. and the Europeans in the months ahead.