Dec 8, 1984

U.S.-EEC DISPUTE OVER TRADE LAW FOR CONCILIATION.

GENEVA, DECEMBER 6 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The new U.S.-trade law provisions relating to wine imports came in for sharp criticism Thursday, at a special meeting of the GATT Committee administering the Subsidies Code in the General Agreement on Tariffs and Trade.-

The special meeting had been called at the instance of the European Community, which had sought multilateral consultations with the U.S. on the new law.-

The new omnibus trade laws enacted in October, among other things, enables producers of grapes in the U.S. to initiate complaints against imports of wine from the European Community on the ground that EEC support to growers of grapes results in subsidised exports of wine into the U.S.A. and that it injures domestic producers of grapes in the U.S.A.-

Both under the relevant GATT articles, and the provisions of the Subsidies Code, investigations for counter-vailing duties to counter subsidies can be initiated only by the industry concerned, and in exceptional circumstances by a government.-

In effect the new U.S. law, has brought grape growers in the definition of the U.S. wine industry, thus overturning a ruling of the U.S. International Trade Commission.-

In assailing the new U.S. law as contrary to U.S. obligations under the General Agreement and the code, the EEC complained that the provisions in the U.S. law would have wide implications and create precedents that went beyond the particular case involved.-

If the U.S. precedent were to be followed and extended to other sectors of trades imports of clothing could be challenged by manufacturers of sewing machines or needles that the subsidy practices of a country in these resulted in subsidising exports of clothing.-

The EEC view received strong support in the Committee from Japan, Australia, Argentina, Sweden, Switzerland, Uruguay, India, Hong Kong and Yugoslavia.-

All of them were clearly concerned over the wider implications and precedents that the U.S. action would create.-

The United States took the position that at the moment the law had merely been enacted, and it involved complex juridical questions, and no actual actions had been initiated.-

This did not, however, persuade the EEC that no action was now called for.-

Efforts of the chairman of the committee, Mr. H. S. Puri of India to evolve a compromise acceptable to both sides however were unsuccessful, and the Community asked for initiation of conciliation procedures under the code for the settlement of this dispute.-

The Committee is to hold another special session early in January to conciliate and settle the dispute.-