New conflicts set to strain relations

Date: 23/11/00

AS IF long-simmering disputes over beef and bananas were not enough to keep EU and US negotiators racking up the frequent-flier miles, a few other trade fights threaten to make for uneasy transatlantic relations next year.

Perhaps the biggest potential conflict on the horizon is over a controversial anti-dumping amendment tucked into the farm bill passed by Congress and signed by Bill Clinton just before the US elections. The new law would give about 46 million euro in anti-dumping duties collected every year on foreign steel and other products to American industry.

West Virginia Senator Robert Byrd attached the measure to the larger bill, which Clinton found necessary to sign despite lamenting the amendment as "objectionable" and urging Congress to override it in future legislation.

Byrd, a respected Senate veteran, will fight to keep the amendment, which he said was necessary to boost depressed steel firms in his home state. Even though Congress may see the bipartisan benefit in averting another trade war with Europe, Byrd will be a tough adversary.

The EU will not simply wait and see what happens. Union officials have asked the World Trade Organisation to rule on the anti-dumping law, anticipating yet another call for retaliatory sanctions. Other countries, including Japan and Canada, have also warned the US that the law is unacceptable. "This is a problem that is not only going to have an impact on the EU," said a Commission spokesman. "This is going to be a rest of the world problem with the US."

Other provisions in the agriculture bill which Clinton signed into law could prove explosive to EU-US relations. Farm Commissioner Franz Fischler dubbed the measure a "threat to global trade" which has "serious consequences for world markets" because it includes direct aid to US farmers worth 26 billion euro in the next year alone.

Genetically modified organisms (GMOs) are also likely to spark conflicts in future, despite the US' efforts to ease global concerns that gene-spliced maize which has not been approved for human use had found its way into food exports.

Member states have been fighting to retain the effective EU embargo on approving GM products introduced in 1998, but the Commission argues that this should be replaced with stricter controls. Planned Union rules on labelling and traceability of biotech crops, which would require US farmers to separate GM from non-GM seeds, could ignite yet another trade fight.

In the meantime, the US and Environment Commissioner Margot Wallström are trying to find common ground through events such as a Brussels conference next month which will hear from experts on a range of biotech issues.

Article forms part of a survey on trade.