More than a year ago, the U.S. and the European Union (E.U.) were embroiled in a bitter trade war over bananas and beef. Ironically, it's now the European consumer who's gone bananas over beef due to the proliferation of mad cow disease.

Bovine spongiform encephalopathy (BSE), more commonly known as mad cow disease, first emerged in Great Britain in the late 70s. However, it wasn't identified until 1986. By the mid-90s, BSE was infecting thousands of cows annually in Britain. The disease was spread through animal feed, which contained animal byproducts.

In 1996, the E.U. banned exports of British beef and feed, and millions of British cows were destroyed. Around the same time, scientists postulated that BSE could be spread to humans by eating infected beef. The human form of BSE--a new variant Creutzfeldt-Jakob disease (vCJD)--is a brain-wasting illness that ultimately kills its victim. There is no cure for vCJD.

In Britain, more than 80 people have died from vCJD, and two in France.

Since first surfacing in England, BSE has spread to several European countries, including Ireland, France, Germany, Belgium, Spain, Portugal, and Switzerland. In Germany, where BSE was discovered late last year, beef consumption has dropped dramatically--up to 80% in some regions of the country. Most German consumers have switched to chicken and turkey, whose costs have risen 10-15%.

The panic over BSE has even hit countries that have been free of mad cow disease. In Italy, for example, beef consumption dropped 35% this past November and December. Not a single case of BSE has been reported in Italy.

To allay the public's fear of mad cow disease, McDonald's has launched a major advertising campaign in Italy stressing the safety of its beef. The burger behemoth also has run similar campaigns in Spain and France.

Because of the prevalence of mad cow disease in Europe, several countries--Japan, Iran, Thailand, Austria, and Ukraine--have banned imports of beef from the E.U. or from some of the E.U. member countries.

The E.U. has taken several actions to eradicate the disease, including the destroying of several million animals. In addition, the organization has banned the use of bone meal and other meat byproducts in all animal feed. This action may be a boon for U.S. soybean farmers. Already, U.S. soybean and soymeal exports to Europe have jumped. However, the Europeans don't like genetically modified organisms (GMOs), so they may look elsewhere for non-GMO soy products.

When it comes to U.S. beef exports to Europe, even the mad cow crisis will have little effect on beef sales to Europe. Because of our use of hormones and antibiotics, the Europeans have been denying U.S. beef imports for years. That probably will not change.

If they don't want our beef, then I say "Let them eat cake!"

Ironically, genetic modification may be one of the answers to BSE. For example, scientists at Texas A&M University recently unveiled a calf that was cloned from a Black Angus bull which died of old age in 1997. The original bull was naturally resistant to brucellosis, tuberculosis and salmonellosis.

The new calf has these same traits, and is 10 to 100 times more resistant to the diseases than a normal animal. Once vaccinated, the calf will be 100 to 1,000 times more resistant.

Because cloning doesn't introduce any new traits into the animal, the Europeans may be more accepting of it. Furthermore, a naturally resistant animal doesn't require the use of antibiotics.

BSE has never been detected in the U.S. In 1997, the FDA banned the use of most animal protein in ruminant feeds.