- The Washington Times - Tuesday, March 4, 2003

Top trade officials from the United States and European Union yesterday acknowledged political tension caused by a threatened war with Iraq by calling for economic stability and cooperation on trade disputes.
"We both agree on the fact that present geopolitical circumstances make it necessary that the United States-European Union trade agenda is handled with care," said Pascal Lamy, the EU trade commissioner, in a joint press conference with U.S. Trade Representative Robert B. Zoellick.
Mr. Zoellick said that the 15-nation European Union and the United States are "joined at the hip economically."
Despite the conciliatory words, the two sides continue to push each other in trade spats.
Mr. Lamy was in Washington yesterday and today for meetings with Mr. Zoellick, Treasury Secretary John W. Snow, Commerce Secretary Donald L. Evans and members of the House and Senate.
High on his agenda are disputes that require the United States to change its laws in order to come in line with international trade rules.
The European Union last week renewed pressure on the United States to comply with a World Trade Organization ruling on international tax law by announcing a list of sanctions that could hit $4 billion in U.S. exports.
And Mr. Lamy wrote an article for yesterday's Wall Street Journal in which he said Europe could not hold off on retaliation without concrete steps toward compliance by the United States.
The European Union is "trying to be helpful" in resolving the disputes but is worried about the lack of progress on the international tax case and several other disputes, Mr. Lamy said at yesterday's press conference.
U.S. companies and politicians also have complained about EU trade practices, especially the bloc's moratorium on genetically modified crops.
The moratorium has kept some U.S. agricultural products out of the European market.
Mr. Zoellick in January said the United States should file a WTO case against the practice, but has since sounded more conciliatory.
Yesterday he said that U.S. policy-makers are losing patience with the European Union over the moratorium and are "working with others" to find a solution.
Still, neither side set concrete deadlines for specific action or retaliation, and both trade officials emphasized the importance of economic stability and the overall strength of economic ties.
The United States exported more than $143.7 billion in goods to the European Union last year, and imported more than $232 billion, according to U.S. government figures.
As a bloc, the European Union is second only to Canada as a market for U.S. products.
But U.S. policy toward Iraq has conflicted with some EU member state governments, notably in France and Germany, while others, like the United Kingdom and Spain, have allied themselves with the Bush administration.
The European Union does not have a common foreign policy, but the bloc does have a common trade policy.
The ongoing disputes color the tone and mood of relations but trade policy is unlikely to affect heavily the substance of political relations, said Michael Calingaert, a trans-Atlantic relations expert at the Brookings Institution, a Washington think tank.
"I think if anything the political situation would make both sides reluctant to take strong action against the other.
"We've got enough problems, let's try not to add on to them," he said.

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