Union and US edge towards deal on agenda for trade talks

Date: 04/11/1999

By Simon Taylor

THE EU and US are inching closer to deals on a range of key trade issues in the run-up to the Seattle meeting which will launch the next round of global trade talks at the end of this month.

US Ambassador to the Union Richard Morningstar told European Voice this week that he was confident divisions between the two sides over the topics to be discussed at the millennium round talks could be overcome. "The differences between the US and the EU on the World Trade Organisation agenda are exaggerated," he insisted.

He also expressed cautious optimism that significant progress could be made in resolving the long-running transatlantic trade disputes over bananas and beef hormones.

The biggest bone of contention between the two sides on the agenda for the forthcoming WTO talks is the Union's insistence that competition and investment rules should be discussed. However, Morningstar insisted that Washington was not opposed to talking about the two issues - contrary to widespread reports that it was adamant about keeping them off the table.

"It is important to make clear that the differences are not on the substance but on the process," said the ambassador, who added that although his government felt strongly that these issues were not ripe for full-blown talks, they could be dealt with through WTO working groups.

If enough progress was made on these subjects while the round was going on, he said, the US would have no objection to incorporating any emerging deal into the final package.

Morningstar's comments were guardedly welcomed by Euro-pean Commission officials. "The US is making moves towards our position," said one. But he added that the approach outlined by the ambassador did not appear to satisfy the Union's demand that competition and investment rules must be formally put on the agenda at Seattle.

On the issue of whether the WTO talks should attempt to strike early deals in specific sectors, Morningstar said he believed differences between the EU and US were not irreconcilable.

He argued that Washington's wish to see an "early harvest" in Seattle was not inconsistent with the Union's view that there should be a comprehensive final deal encompassing as many sectors as possible.

"Deals in specific sectors can be treated on a provisional basis so that if there is no wider agreement they can fall by the wayside," said the ambassador, who suggested there was scope for such deals to be struck in four areas.

These include reform of the WTO's dispute settlement procedures, which has been a major source of conflict in the EU-US banana row, and a package of tariff-reduction measures in eight industrial sectors, known as 'Advance Tariff Liberalisation'.

Other possible deals include rules on transparency in public procurement and an agreement to keep electronic commerce free of any new duties.

But Commission officials said the US seemed to be working to a different political timetable from the Union. "They are trying to get deals at Seattle while we are taking a more medium-term view. This is only the start of the round which is going to take three years", said one.

Morningstar also stressed that there was strong political will to find solutions to the disputes over bananas and beef hormones. "There is a strong belief that resolving both these issues would be evidence of the importance of the EU-US economic relationship," he said.

The ambassador claimed that proposals presented by Washington for reforming the Union's banana regime could provide a basis for a solution. But American officials have warned that the chances of a deal will be reduced if the Commission proposes a scheme which includes two ways of allocating import licences.

Morningstar also confirmed that the two sides were exploring a possible temporary solution to the beef-hormone dispute which would involve giving the US greater access to the European market for its hormone-free beef.

The EU and US are inching closer to deals on a range of key trade issues in the run-up to the Seattle meeting which will launch the next round of global trade talks at the end of November 1999.