Brussels, 16/05/2000 (Agence Europe) - European Commissioner Franz Fischler declared himself "dismayed" by the announcement of an impending tightening of American quotas on the import of European wheat gluten, quotas that are already at the heart of a transatlantic dispute within the World Trade Organisation (WTO). To alter the system will not settle the problem of a lack of competitiveness of the American wheat gluten industry faced with the much more efficient corn starch industry, stressed an official responsible for the European common agricultural policy in a letter to his American counterpart Dan Glickman. Whatever, he warned, the Union will reintroduce a customs duty on the import of foodstuffs based on American wheat gluten, should quotas last longer than the period initially planned (31 May 2001), this "so as to maintain the balance of concessions achieved in the framework of the Blair House Agreement.
According to Franz Fischler, the "most inopportune" initiative of Washington will further discriminate against the European industry and wreak havoc on trade relations between EU suppliers and their US customers, while leading to greater complexity in the management of the quotas. The restrictions, which should take effect on 1 June, could indeed divide the EU quotas into fourths, with applications required for each quarter, which would raise a double difficulty: for Europeans, cutting the quota by 75% at this late stage; for the American customs the difficult task of allocating licences in a fair manner and not disrupting trade. In addition, he goes on in his letter, the new quarterly quota would increase the uncertainty of traders, further complicate the task of the American customs and increase the risk of error on their part, given that last year they were unable to record declared imports properly against the EU quota (see EUROPE of 4 June 1999).
EUROPE recalls that the quota introduced in May 1998 (24,513 tonnes of European wheat gluten, with an annual rise of 6%) was the subject of failed consultations in the framework of the WTO dispute settlement procedure. The legality of this measure, taken to safeguard against imports from Europe (but not those of Canadian origin), under the pretext that they undercut prices on the other side of the Atlantic, has now been subjected to the arbitration of a panel of experts. In this context, the Union argues that it is a breach of the terms of the multilateral agreement on safeguard measures. "The problems for US wheat gluten (a co-product of wheat starch) cannot be traced to the import from the EU but are linked to the US industry's difficulty in competing against the more efficient corn (maize) starch industry", said a spokesperson.