- The Washington Times - Saturday, June 29, 2002

The Bush administration expressed outrage yesterday at plans by the European Union to reduce its imports of American rice and grains.
Europe is planning to curb access to its market by tweaking a complex system of tariffs and quotas, a decision that puts at risk about $300 million in American shipments to the 15-nation group, U.S. officials said.
U.S. Trade Representative Robert B. Zoellick and Secretary of Agriculture Ann M. Veneman issued a joint statement that the proposed change would rescind promises Europe made in the early 1990s during the Uruguay Round of negotiations that created the World Trade Organization.
"The European commitments on market access for imports of wheat, feed grains and rice are among the most important obligations the EU undertook in agriculture," they said. "The United States and other countries negotiated their commitments based on the understanding the EU would uphold its market access obligations."
Bob Cummings, vice president for international policy at the USA Rice Federation, a trade association, said the European change threatens to wipe out American sales in Europe.
"That concession has allowed us to maintain our sales in Europe, and we want to keep it," he said.
European Commissioner for Agriculture Franz Fischler countered that the European Union plans to change its import system but that no harm will come to American exports.
"We have no intention to restrict access of cereals and rice to the EU market," he said in a statement.
The new dispute over rice and grain trade, which has surfaced during the past few weeks, represents an additional burden to a trans-Atlantic trade relationship that is already groaning under the weight of several other disputes.
The Bush administration's decision in March to slap a 30 percent tariff on steel imports irritated European allies, who are threatening to retaliate with $366 million in trade sanctions. Europe and the United States are also wrestling over changes to an American tax law that a WTO arbitration panel has called a violation of international trade rules.
At the same time, Mr. Zoellick and European Trade Commissioner Pascal Lamy are trying to push ahead a round of WTO negotiations that began in November in Qatar. In those talks, poorer countries are agitating for rules that allow them to sell more farm products to rich nations.
Under WTO rules Europe is theoretically allowed to change concessions it granted in previous negotiating rounds. In practice, the prospect of taking back previous promises to open markets always triggers criticism from other trade partners.
The proposal must still be approved by the European Council, the body that represents national governments in the European Union. It involves altering a system that regulates exports from the United States and other countries based on a complicated mathematical formula.
Allen Johnson, the top official for agriculture at the Office of the U.S. Trade Representative, met with European officials last week to discuss the plans. Mr. Zoellick also wrote to Mr. Lamy on June 12 to warn the European Union that the change would harm the new WTO negotiations.
"It is also an extremely negative signal for [Europe] to send all WTO members interested in agriculture, especially for developing countries, just as we are beginning WTO negotiations to expand agricultural trade," Mr. Zoellick wrote.


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