Europeans Urge France to Back off Trade War with US

Article excerpt

STRIVING to avert a wide-ranging trade war, the European Community is urging that the EC and the United States return to the negotiating table and settle their dispute over farm subsidies.

On Nov. 5, the US announced a 200 percent tariff on $300 million worth of EC white-wine exports and other products, to take effect Dec. 5 unless its dispute with Europe over oilseeds subsidies is settled.

When the issue is discussed at a meeting of EC foreign ministers today, the ministers are expected to emphasize that negotiators use the time until Dec. 5 in a last-ditch effort to reach an accord.

The French are expected to ask the EC today to draw up a list of retaliatory measures, according to Reuters. But the European Commission "will be divided on sanctions," a German government official said Friday, adding that "the majority will be for a counterretaliation."

Last week French Minister of Industry and Trade Dominique Serauss-Kahn said he still supports a return to negotiations, and he hopes for "a gesture from the Americans." But "if in a month nothing has advanced, France will very firmly demand that countermeasures be put in place," he told French television.

A counterretaliation could spark a trade war, doubly damaging because many of the countries involved have such weak economies already. A trade war would only prolong recovery, and worse, threaten the whole global trading system by dooming the floundering world trade talks, officially known as the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).

Arthur Dunkel, director-general of GATT, has called an emergency meeting tomorrow of Uruguay Round negotiators to consider the "very grave situation" that has arisen.

Bearing the consequences in mind, the British, who hold the rotating presidency of the EC, tried mightily last week to steer the EC away from retaliation. In an emergency meeting in London Nov. 6, British Prime Minister John Major and EC Commission President Jacques Delors issued a statement that "Negotiations must continue to avoid a trade war. …