Marathon Man on Track to Tackle Trade Puzzles; EU Commissioner Pascal Lamy Tells Stewart Fleming Tensions with the US Will Be Hard to Resolve

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THE phrase "trade war" scarcely does justice to the destructive potential of the looming bust-up between America and the European Union over Washington's tax subsidies on the exports of US-based multinationals. Indeed, Robert Zoellick, America's Trade Representative has warned that unless it is resolved peacefully the conflict could have a "nuclear" impact on already strained economic relations.

It is not just the unprecedented scale of the estimated $4 billion ([pound]2.8 billion) of trade sanctions which the EU has been authorised by the World Trade Organisation to impose on American exports of anything from Boeing jets to Intel computer chips that is the measure of the potential damage.

The WTO's decision could be swiftly followed by other disputes over commercial aircraft, geneticallymodified food and American efforts to protect its steel industry from international competition.

That in turn would strengthen the hand of those in Washington who believe that, as America languishes in recession, its European allies in particular are proving more difficult to deal with than they should be.

"The US has not come to terms with the fact that, on economic issues in particular, Europe cannot be treated as a junior partner any more," says Jeffrey Lang, a former deputy US Trade Representative and now a partner in one of Washington's top law firms.

The European official charged with trying to prevent trade relations turning really sour, while making sure that Washington gets the message that it has to abide by international trade rules, is Pascal Lamy, the EU's 54-year-old Trade Commissioner.

The idea of the EU as a " superstate" may be just a gleam in the eye of a few visionary Eurofederalists and a spectre which haunts British eurosceptics.

But as regards trade the EU is, in dollar terms, as big a player as America on the world stage.

The 15 EU States have, unusually, delegated to the Trade Commissioner the authority to negotiate internationally on their behalf.

When it comes to trade, it is Lamy's telephone that Washington has to call.

A wily French socialist intellectual on the modernising wing of his party, Lamy has a presence which reflects the physical strength of the marathon runner that he is. …


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