Originally created 03/09/99

Nations accuse U.S. of unfair trade practices



GENEVA -- Accusing Washington of "declaring war" on countries that fail to toe the U.S. line on global trade rules, the European Union charged in an emergency meeting Monday that the United States was unfairly waging a banana battle with its rivals.

But many countries told both trade giants that they were fed up with endless meetings of the World Trade Organization and that the United States and European Union should resolve their differences and stop tying up the world agenda.

E.U. trade ambassador Roderick Abbott told the meeting that the United States was "unjustified, unauthorized, unlawful and unacceptable" when it ordered importers to deposit funds to cover pending sanctions on $520 million worth of goods imported from the European Union.

The 100 percent tariff effectively doubles the price of the goods. The affected imports include textiles, as well as includes Louis Vuitton handbags from France; Parma ham and feta cheese from Greece, France and Italy; German coffee makers; and British sweet biscuits.

The tariff intends to block those goods from the U.S. market in retaliation for $520 million in lost sales U.S. banana companies claim they've suffered because of unfair European trade barriers that discriminate in favor of bananas grown in their former Caribbean colonies.

Mr. Abbott said exports of the target goods had been stopped effectively by the move even though the United States does not so far have WTO permission to impose sanctions.

The items on the list affect all countries of the 15-nation European Union except Denmark and the Netherlands.

"The United States is declaring war on any or all WTO members whose compliance it decides is inadequate and -- to judge from our recent experience -- on the basis that it will enforce its rights but will not necessarily respect its obligations," Mr. Abbott said.

U.S. trade ambassador Rita Hayes insisted the United States was completely within its rights.

A trade official who observed the meeting told reporters on condition of anonymity that delegations not directly involved in the dispute generally had criticized the United States for its actions.

But delegates also criticized the European Union for requesting an emergency meeting of the general council of all 134 members with only three days' notice.

The United States has been grumbling about E.U. banana policy for seven years, and the dispute is following two parallel tracks in the WTO. Informally, trade officials are expecting WTO judges to rule on both tracks by the end of March.

The judges must decide whether Europe has gone far enough to meet WTO requirements on its banana policy and it must determine whether Washington's proposed tariffs are appropriate to compensate for losses suffered by the United States.

Monday's meeting was the latest in a series of WTO meetings on the subject of bananas. One meeting in January lasted a week and blocked consideration of other disputes pending before the WTO.

Smaller delegations complained they cannot afford to send representatives to all the meetings, the official said.

WTO spokesman Keith Rockwell said Canadian Ambassador John Weekes told the closed-door meeting the world was mesmerized by the dispute even though E.U.-U.S. trade amounts to only 5 percent of the global market. The WTO should focus on the other 95 percent, Mr. Weekes said.

But U.S. negotiators were adamant that the measures taken by the Clinton administration were the proper way to proceed against European foot-dragging.