8 June 2001

EU-US trade war over?

THE trade war between the EU and the US over sales of wheat gluten appears to be over, with Washington agreeing to scrap its import quotas.

Restrictions were imposed in 1998, when the US limited EU exports to just 24,500t/year – 40% less than previously traded. This was in response to the high subsidies paid on EU wheat starch, which the US said acted as a subsidy on the wheat gluten by-product.

Brussels denied this and took the matter to the World Trade Organisation in Geneva which, late last year, ruled in its favour.

In response, the EU imposed its own retaliatory duty of 5k/t (£3/t) on 2.73m tonnes of US maize gluten.

But then peace broke out this week, with Washington promising to dismantle its quotas and the EU agreeing to remove its tariffs.

"I am pleased that this trade irritant is now behind us," said EU farm commissioner Franz Fischler. "The alternative – a prolongation of the WTO-condemned measure – would have sent a very bad signal for the bilateral relationship." n