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EC Threatens to Curb U.S. Farm Goods

June 17, 1986|Associated Press

LUXEMBOURG — The European Communities on Monday threatened to restrict imports of key U.S. farm products if President Reagan exercises a threat to impose punitive tariffs on certain European products next month.

A toughly worded statement by Common Market foreign ministers said the 12 member nations would retaliate by limiting imports of U.S. corn feed, rice and wheat.

No decisions were made on the exact form of restrictions or their severity.

The ministers expressed deep concern at a trade dispute that they called a "grave threat to commercial relations" between the world's two largest trade partners.

Reagan already has taken preliminary steps to raise tariffs on a lengthy list of European products July 1 in retaliation for a large increase in Spain's import duties on U.S. corn and sorghum.

The dispute has been escalating since March 1, when more restrictive Spanish and Portuguese import rules on certain farm products took effect. The restrictions were required under terms of the Common Market membership treaty that Spain and Portugal signed a year ago.

The United States contends the restrictions could cost its farmers several hundred million dollars in lost export business.

U.S. Commerce Secretary Malcolm Baldrige has called the dispute "trade problem No. 1" for the Reagan Administration.

Willy de Clercq, the Common Market's top trade official, told reporters in Luxembourg that he remained willing to negotiate a settlement with the United States.

He called the Monday decision a "double-track approach"--continuing to negotiate but also signaling the Common Market's willingness to fight back.

The foreign ministers said Common Market limits on U.S. corn feed, rice and wheat would go into effect at the same time as the threatened new U.S. measures.

De Clercq said he would be meeting with his U.S. counterpart, special Trade Representative Clayton K. Yeutter, at a conference in Annapolis, Md., on June 30. He said formal negotiations in Geneva are deadlocked.

Sir Geoffrey Howe, the British foreign minister, told reporters that the risk of an all-out trade war with the United States "is now closer than it ought to be."

Howe, who will take over as chairman of the Common Market's governing Council of Ministers July 1, urged the Reagan Administration to delay its July 1 deadline to allow more time for negotiations.

"If that postponement does not prove possible then, as we've agreed today, the Community must stand firm and make plain that its continuing willingness to negotiate will be accompanied by a readiness to take the equivalent countermeasures," Howe said.

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