Carousel trade sanctions face backlash in US

Date: 27/07/00

By Peter Chapman

FIERCE opposition from US industry and consumers to their own government's plan to rotate the sanctions imposed on EU firms in the battles over beef and bananas are further delaying proposals to target a new list of products, according to European Commission sources.

After weeks of talks between government agencies and submissions from the private sector, the US has yet to announce details of the planned changes to the penalties on nearly €330-million worth of EU goods.

The US Trade Representative's office this week blamed the delay on the need for President Bill Clinton to formally approve the move, arguing that he had been side-tracked by efforts to broker a Middle East peace deal and the G8 meeting in Japan last weekend. But EU sources claim it has been caused in large part by the deep unpopularity of the so-called 'carousel' measures in the US.

They say many of those who responded to Trade Representative Charlene Barshefsky's questionnaire on the issue complained that the sanctions increased prices, affected the sales and profits of American outlets stocking EU goods and stoked up trade tensions with the Union.

"They are having a hell of a time putting a list together," said an aide to Trade Commissioner Pascal Lamy. "Our information is that out of the responses that they have received, 99% were saying 'we don't like it and we don't want sanctions'. It makes it difficult for them to put together a list."

Washington has levied 100% duties on just over €200-million worth of EU handbags, bed linens and other goods since April 1999 in the dispute over the EU's banana regime. Additional duties worth nearly €125 million have been imposed on Danish hams, French pate, Italian tomatoes and other food products in the row over the Union's ban on imports of hormone-treated beef.

Fierce opposition from US industry and consumers to their own government's plan to rotate the sanctions imposed on EU firms in the battles over beef and bananas are further delaying proposals to target a new list of products, according to European Commission sources.