U.S. Trade Representative Robert B. Zoellick yesterday toned down his earlier threats to bring an international trade case against the European Union's ban on genetically altered food, underscoring the Bush administration's reluctance to pick a trade fight with Brussels as war looms in Iraq.
At a news conference, both Zoellick and his European counterpart, Pascal Lamy, struck relatively conciliatory poses on a number of issues in an effort to ensure that transatlantic trade disputes don't inflame divisions between Washington and some of its European allies over the Bush administration's Iraq policy. Their soothing rhetoric appeared aimed also at countering calls by some U.S. lawmakers for sanctions and boycotts against French and German products.
"We both recognize this is a time of international tension and uncertainty," Zoellick said. Despite differences, with $770 billion in two-way trade, "the plain fact is that the United States and the European Union are joined at the hip economically."
Echoed Lamy, who is on a two-day visit to Washington: "The present geopolitical circumstances make it even more important that the EU-U.S. trade agenda is handled with care and a lot of cooperation."
Zoellick was especially restrained, in comparison with his previous statements, on the subject of the EU's four-year moratorium on genetically modified plants such as corn and soybeans. In early January, he blasted the EU's stance on biotechnology as "immoral" because it was keeping poor African countries from obtaining badly needed food. He declared himself in favor of promptly bringing a case against the EU at the World Trade Organization, adding that "there is pretty broad agreement" among his administration colleagues to do so.
Asked yesterday whether he still held that position in light of concerns about U.S.-European unity on Iraq, Zoellick repeated his view that the EU biotech ban violates WTO rules and that "the infection of the illegality is spreading" -- a reference to African governments' refusal to accept gene-altered crops for fear of losing access to European markets. "We've tried to hold off" on filing a WTO case, "but we're getting to the point where our patience is running thin," he said.
Pressed on whether he still favors launching a WTO complaint, Zoellick replied, "I've said all I'm going to say." But a Cabinet-level meeting to decide on the filing of a WTO case has been deferred for weeks, and U.S. farm organizations have grudgingly accepted the reality that they will have to wait at least a while longer for the action they have long been demanding.
"We're clearly resigned to the fact that the issue of European support for the war on terrorism, and Iraq specifically, is having an impact on the issue of going forward with the WTO case," said Ronald Gaskill, director of international trade policy at the American Farm Bureau. The main aim of Lamy's visit is to intensify pressure on the administration and Congress to rewrite those laws, in particular a huge tax break for multinational corporations that the WTO has decreed to be an illegal export subsidy. But while warning that the WTO system could break down if Washington balks at changing the law, Lamy said Brussels would refrain for now from invoking its right granted by the WTO to impose $4 billion in retaliatory sanctions against U.S. products.