Thorny issues looming in EU-US agriculture talks

Date: 09/01/1997

ICY farm trade relations between the EU and US have thawed temporarily following the decision to delay the introduction of new Union hygiene regulations.

But the months ahead look certain to see a return to the problems which have dogged transatlantic relations, even since the signature of the Uruguay Round world trade agreement and its famous 'peace clause'.

Negotiators failed to conclude talks before Christmas on mutual recognition of meat hygiene standards, threatening to block US exports to the Union worth up to 700 million ecu.

But at its final meeting of 1996, the EU's Standing Veterinary Committee agreed to a three-month extension of the current import licensing arrangements, allowing member state governments to suspend the introduction of harmonised

EU standards until the end of March. Commission officials are optimistic that this will provide enough respite to conclude complex negotiations which have dragged on for over two years.

The two sides hope to conclude talks by the end of February, allowing the introduction of new EU rules on 1 April without further blocks on trade from the US, Canada, Australia and several other major trading nations.

But transatlantic relations are still clouded by the EU's continuing failure to honour commitments to compensate the US for trade it lost with Austria, Finland and Sweden when they joined the Union in January 1995.

The threat of a dispute settlement panel in the World Trade Organisation (WTO) remains, and this has encouraged the Commission to come forward with proposals to meet the Americans' outstanding demands.

But in an unprecedented development before Christmas, the so-called '113 committee' of member state trade officials rejected plans to open a 30,000-tonne reduced tariff quota for imports of US malting barley.

The Commission's decision last month to approve Ciba-Geigy's genetically-modified maize removed one potential flashpoint from EU-US relations, but differences over meat hormones and bananas seem certain to bring the two sides to blows over the coming weeks.

A WTO panel on complaints about the EU's preferential arrangements for bananas is expected to complete its interim report by the end of this month, although a final ruling will not follow until later this year. Resolution of the hormone dispute is unlikely until late spring.