By Farmers Weekly staff

WASHINGTON appears to have lost its battle with Brussels over the tight import restrictions it has imposed on EU wheat gluten for the past two years.

The 24,500t-a-year quota was introduced on the grounds that the USAs own industry was suffering due to high EU subsidies for wheat starch.

Wheat gluten, as the by-product, was effectively subsidised too, it argued, putting undue pressure on US prices.

The move limited the EU to 60% of its former trade, prompting Brussels to raise the matter with the World Trade Organisation in Geneva.

The commission has consistently argued that it is not imports from Europe that have put pressure on US wheat gluten producers, but competition from the USAs own maize starch producers.

An interim ruling from the WTO disputes panel last week tended to support this view.

A final ruling is expected next month, and should pave the way for the EU to retaliate.

A Euro5/t (3.15/t) tax on 2.73 million tonnes of US corn gluten is planned.

Tension between the two trade blocs was heightened earlier this year when the USA cut its quota for EU wheat gluten.