U.S. trade sanctions against EC imminent

October 29, 1992|By Journal of Commerce

U.S. officials said yesterday that there was little hope of salvaging a world trade accord soon, and they told the European Community the United States would announce trade sanctions in a related dispute on oilseeds shortly after the U.S. presidential election Tuesday.

The U.S. announcement of more than $300 million in punitive duties could occur at a Nov. 4 meeting of the General Agreement on Tariffs and Trade in Geneva, according to U.S. officials. U.S. Trade Representative Carla A. Hills said retaliation would come "in a matter of days."

GATT, the 105-nation organization that sets most rules for international trade, is coordinating the Uruguay Round of trade reform talks, which has been blocked for nearly two years by a U.S.-EC dispute over agricultural trade reform.

After several weeks of off-and-on-again attempts to resolve the agricultural dispute, a U.S. official said yesterday: "A certain sense of grimness has set in on the U.S. side. We don't see a way out of this."

Ray MacSharry, EC agricultural commissioner, tried in vain Tuesday and yesterday to set up a meeting to revive the trade talks, but U.S. Agriculture Secretary Edward Madigan rejected the offer.

"We don't see any evidence that [the EC is] willing to make a serious offer," a U.S. official said. "We're not going to have a meeting without some movement."

The official agreed that Mr. MacSharry seemed to be seeking political cover through the meeting.

"We're not going to give it to him," the official said.

The EC negotiating team, meanwhile, appears in disarray, and Jacques Delors, commission president, was again on the defensive, angrily denying charges he was blocking progress in the talks.

On Tuesday, Frans Andriessen, external affairs commissioner and the EC's top negotiator, told Dutch television that Mr. Delors was pushing a less flexible negotiating position than that advocated by other commissioners, including himself and Mr. MacSharry.

That follows comments made last weekend by Britain's president of the Board of Trade, Michael Heseltine, who charged that Mr. Delors was showing more interest in the farmers of his native France than in what was best for the community.

Mr. Delors, in London to meet with heads of government from four Eastern European countries, furiously denied Mr. Heseltine's charges and dismissed any split within the commission on the GATT talks.

"When we have a meeting of the commissioners I give my advice as the president of the commission. We have differences of opinion within the commission all the time. My job is to create a collegial spirit within the commission," he told reporters.

British Prime Minister John Major, who met the Eastern European leaders with Mr. Delors, encouraged the commission president yesterday to strike a successful deal as soon as possible.

Mr. Major, who is facing immense pressure within his own Conservative Party over Britain's role in the EC, has invested enormous political capital in securing a deal on the Uruguay Round. Such a breakthrough, he said, would provide a boost to Britain's battered economy.

British government officials remain troubled over what one official referred to as "clumsy negotiating" undertaken by EC officials last week. During discussions with Joe O'Mara, U.S. agriculture negotiator, they backtracked on a host of earlier farm trade concessions, prompting the United States to walk away from the table.

Senior British officials said they have no doubt that Mr. Delors, who is said to harbor ambitions to be president of France, was behind the hardening of the EC's position.

Mrs. Hills said the talks had been hindered by the "conflicting interests" among EC states and even among negotiators from different states.

"I have in my experience talked to one commissioner on a topic only to find another commissioner holding quite a different view. It has plagued us for the past two years and it continues to plague us," she said.

U.S. officials have said they wanted to hold off on trade retaliation in the oilseeds case as long as a glimmer of hope remained in the Uruguay Round. At next week's meeting of GATT's ruling council, the United States could act by first asking permission to "withdraw concessions" or impose punitive duties.

Under GATT rules, there must be a consensus for this to take place. Normally, a vote is not taken when a country seeks authority to retaliate, but if the community were to block the formation of consensus, the council could put it to a vote. Should the EC vote against the motion, the United States would not have GATT authority to take action, but would have strong support from most other GATT members.

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