Brussels/US trade war looms over gluten

By Philip Clarke, Europe Editor

A TRADE war is brewing in Brussels as the EU commission plans to impose a £3.40/ t tax on imports of US corn gluten.

At their last meeting before the summer recess today (Wednesday), commissioners called for the duty on the 2.73 million tonne trade, in direct retaliation for last months US decision to impose a 24,500 t quota on EU exports of wheat gluten.

The USA maintains its action is justified, because EU wheat gluten is effectively subsidised by high grain support prices and state aids to starch producers.

But the EU complains the quota will cut its sales in half and is trade-restrictive. The loss of business will cost the EU well over the £9m it would raise from the import tax.

Permission for the new duty still has to be granted by EU ministers and there could be further delays due to WTO rules concerning such retaliation. These state that unilateral action may only be taken after three years, or after permission has been given by the WTOs Dispute Settlements Body.

The row follows on from last months skirmish between the two sides over the subsidised sale of 30,000 t of EU barley to California. This was countered by a 30,000 t shipment of US grain to traditional EU markets, subsidised under the export enhancement programme.