The European Community and the United States have agreed to a moratorium on trade retaliation while talks continue on a dispute over community preferential trade arrangements, EC and U.S. officials said today.
The agreement, reached by U.S. Trade Representative Clayton Yeutter and EC External Affairs Commissioner Willy De Clerq, includes a significant reduction in the price supports the community provides to its pasta exporters, the officials said.
The United States had threatened a sharp increase in tariffs this month on community imports of pasta to compensate for losses suffered by American citrus growers denied access to EC markets. The community has preferential agreements with Mediterranean countries that favor their citrus products.
The community in turn had said it would boost tariffs on U.S. nut and lemon imports if the American measures were carried out.
Yeutter and De Clerq, during talks on the margin of a trade ministers' meeting Thursday in Sault Sainte Marie, Ontario, agreed to a four-month moratorium on the retaliatory measures, the officials said.
A U.S. official here said the agreement "gives us more breathing room" for further talks on the citrus issue, which threatened to exacerbate U.S.-EC relations at a time when tension is high on other agricultural questions as well as steel trade. The disputes also complicate preparations for a new multilateral trade round.
The United States recently drew strong criticism from the EC when it decided to provide surplus farm products to American exporters to help them recapture markets won through allegedly unfair EC trade practices.
On steel, the United States has said it might unilaterally limit EC imports if its July 15 deadline for the conclusion of negotiations on steel trade is not met. Negotiators have met here this week to discuss the steel questions, which involve 17 categories of EC semi-finished steel and other steel products.