By Darren Ennis
BRUSSELS, March 16 (Reuters) - The European Commission is offering to double the preferential quota for beef imports from the United States as part of a deal to end a long-standing dispute over beef trade, EU sources familiar with the plan said.
Last week, Washington said it would hold off on applying new retaliatory duties to EU products while it negotiates with Brussels on a solution to the trans-Atlantic row, sparked by an EU ban on U.S. imports of hormone-treated meat in 1988.
But the sources told Reuters the plan by the EU executive -- which oversees trade and food safety policy for the 27-nation bloc -- did not include lifting the embargo which Brussels says is based on scientific advice and is not protectionist.
"The proposal is aimed at giving a bigger incentive to U.S. beef farmers to export normal-treated beef in return for the U.S. ending its sanctions," one EU source with knowledge of the proposal said.
"The ban on hormone-treated beef stays. The Commission was quite clear on that," another EU source said, adding the proposal was discussed at a regular closed-door meeting of EU trade officials on Friday.
The United States and Canada currently pay a reduced tariff of 20 percent on the value of the first 11,500 tonnes of beef exported into the EU. Any beef imported above this quota must pay a combined tariff of 12.8 percent duty plus 3,000 euros cash ($3,877) per tonne.
Under the new proposal, the reduced quota would be increased to between 20,000 and 30,000 tonnes in return for an end to U.S. sanctions on EU goods -- known as "carousel measures" -- worth around $116.8 million a year, the EU sources said.
FRENCH AND IRISH
EU Trade Commissioner Catherine Ashton is expected to discuss the proposal with new U.S. Trade Representative Ron Kirk on a visit to Washington on Tuesday.
Diplomats in Brussels said France and Ireland -- two of the EU's largest beef producers -- are opposed to the deal which requires the approval of the majority of the bloc's 27 member states.
Washington imposed duties on a raft of EU products in July 1999 after winning a World Trade Organization case in which it argued the EU's ban on beef treated with artificial growth hormones was not supported by science and breached WTO rules.
The EU amended its ban in 2003 and filed another case challenging the continued application of the retaliatory tariffs. The WTO's top court issued a decision in October that the United States says upheld its continuing right to impose trade measures on EU products.
The outgoing Bush administration changed the list of products facing duties in January, adding meat, chewing gum, chocolate, certain jams, and some fruit. Mineral water and chestnuts from France were added, and the duties on Roquefort cheese were to be hiked to 300 percent.
The new action was slated to take effect on March 23. But the USTR's office said it would delay the new tariffs until April 23 to allow for renewed negotiations with the EU which threatened further WTO action. (Editing by Sue Thomas)