Brussels, 28/01/2002 (Agence Europe) - After long and frank discussions with his counterpart and friend, Bob Zoellick, European Commissioner Pascal Lamy declared that he was "satisfied" with the USA promise to make all serious attempts, "in good faith" and with a prompt response to bring their fiscal code into line with the World Trade Organisation's judgement on Extra Territorial Income (ETI). Sources close to the Commissioner indicated that this was the message they wanted to hear. Consultation procedures between the two sides is not, however, the starting point and the truce between the Union and the USA is far from being signed and sealed and does not exclude the danger of a large scale trade war breaking out
In an effort to avoid an impasse, Mr Lamy and Mr Zoellick reached agreement on a number of principles: guidelines that ought to pave the way for three-way discussions with Bill Thomas, President of the influential "Ways and Means Committee", at the US Congress and that should lead to a solution that is acceptable to all sides. Mr Lamy did however, warn that this did not rule out the EU using the instruments that the WTO had provided it with but the Commissioner declined to mention what these instruments might be. In the Union's favour, is the scope of compensation it could temporarily obtain as a means of gaining greater access to the US market for EU products, until the illegal subsidies are cut back from the American fiscal code. But the ferocity with which the US has pursued a policy to avoid the straightforward banning of these protective mechanisms provide a fore taste of the difficulties that could ensue, especially in the current difficult economic climate. In an effort to ensure that the process moves forward in a "satisfactory way" and does not continue endlessly, the Union is also keeping a coercive weapon up its sleeve that will represent sanctions that it can apply to the US as from next April. The amount still remains to be worked out (this could be calculated at Geneva on 28 March) but could certainly be to the tune of billions of dollars. Mr Lamy has declared that he does not want to see this kind of tit-for-tat reaction and would prefer to see a peaceful solution based on conformity. But in a speech after his meeting with Mr Zoelick at the Woodrow Wilson International Center for Scholars, Mr Lamy stressed that it would be foolhardy to imagine that playing the conformity card would rule out a more vigorous EU reaction at this stage (Europe will be returning to this issue).
Other disputes: steel and GMOs
In other transatlantic disputes, the question of conformity was central, declared Mr Lamy, in a reference to the 1916 US law on anti-dumping and section 110 of the legislation on authors' property rights. Mr Lamy stated that it was now the time to find an acceptable solution to these issues. Commissioner Lamy conceded that the embargo on meat with hormones still held but they were working on a package of compensatory measures.
Commissioner Lamy also mentioned the threat of surtaxes on European steel imports from between 20% and 40%, a threat that could come to a head on 6 March. President Bush's decision at the behest of the federal International Trade Committee is being awaited with considerable interest, asserted Mr Lamy who on a warning note, added, "we want an internationally agreed solution to reduce world-wide capacity, and are ready to see the US government step in to address the real problem of legacy costs" but that these two steps, "require the US to pull back from the brink of unilateral border protection". The Commissioner stressed that, "There is not acceptable solution involved in restricting imports, and any such decision will have very serious consequences".
On the issue of genetically modified organisms (GMOs), Mr Lamy gave his assurances that the moratorium was not out of protectionist reasons but that it reflected, "the fact that food safety is a highly sensitive and political issue for European citizens", although the best chance to, "relaunch the process of approvals, the best moment in the political climate, will come later this year, when our new law on approvals comes into force". (Editor's note - labelling and tracing).