(adds background on case, EU diplomat comment)
By Doug Palmer
WASHINGTON, Jan 15 (Reuters) - The Bush administration is expected to announce as early as Thursday that it is revising a list of $116.8 million worth of European Union goods hit with retaliatory duties in a beef spat going back to the 1990s, sources said.
The EU is expected to react angrily to the move, which creates a new headache for European exporters.
The sources spoke on condition they not be identified because the decision has not been announced.
The U.S. Trade Representative's office said on Oct. 31 it was considering changing the decade-old retaliation list and planned at that time to announce any modifications to existing tariffs by the end of 2008.
At her final news conference on Tuesday, U.S. Trade Representative Susan Schwab hinted she still had some announcements to make before the Bush administration leaves office on Jan. 20.
The United States imposed the duties after winning a World Trade Organization case in the late 1990s in which it argued the European Union's ban on beef from cattle treated with artificial growth hormones was not supported by science and inconsistent with WTO rules.
The EU amended its ban in 2003 and filed another case challenging the continued application of the retaliatory tariffs. The WTO appellate body issued a decision in October that the United States says upheld its continuing right to impose trade measures on EU products.
The European Commission, which oversees the bloc's trade policy, said its decision to ban U.S. hormone-treated beef was based on scientific advise and not protectionism.
Earlier in the long-running case, U.S. cattle producers had pushed USTR to take a "carousel" approach to the trade duties, under which the list of EU goods hit with retaliatory sanctions would be changed every six months to maximize pressure on Brussels to lift the ban.
U.S. officials rejected that approach at time. The idea of changing the sanctions list re-emerged only recently.
(Additional reporting by Darren Ennis in Brussels; editing by Vicki Allen)