‘Pasta war’ truce called

Press, 10 July 1985, Page 10

‘Pasta war’ truce called

NZPA-NYT Washington The United States and the 10-nation European Economic Community have reported a one-week truce in a bitter trade dispute over pasta, citrus fruits, and walnuts. Both sides said yesterday that the conflict could be resolved by the end of the week. “We’ve made some progress, definitive progress, in my judgment, over the week-end,” said Clayton Yeutter, the new United States Trade Representative, in his first day of interviews since his swear-ing-in last week. < “And we’re a lot closer to a solution of this controversy than we were a few days ago.” Ella Krucoff, a spokesman for the Common Market’s Washington office, said that she expected a final resolution by the end of this week, possibly in Ontario, where Mr Yeutter and the top trade officials of Canada, Japan, and the Community gather for a regular, four-party meeting on Friday through Monday. In late June the United States ordered tariffs of 40 per cent on imports of European pasta containing egg and 25 per cent on pasta without eggs, both up from less than 1 per cent. The tariffs, to have taken effect on July 7 but now suspended, were ordered in retaliation for what the United States has called preferential treatment that the Europeans have given to imports of citrus fruits from Mediterranean countries over American fruit. The:’ Commuhiy, through its Foreign Minister, Dr Willy de Clercq, a Belgian, countered with a decision to raise tariffs on its imports of, American walnuts and lemons, effective by yester-

day. Then Senator Pete Wilson, (Rep., California), proposed urging the President, Mr Ronald Reagan, to raise duties on imports of European wine — which would have greatly raised the stakes by pushing the value of the affected trade from tens of millions of dollars to close to SUS2 billion (?4.22 billion). Mr Yeutter said that he had been dealing with what he called “a little pasta war” throughout the weekend, mostly by telephone with Dr de Clercq. He and European officials declined to say how they expected to settle the dispute. “There are proposals out there that we are considering,” Mrs Krucoff said. In the interview yesterday, Mr Yeutter said that he expected protectionist pressures of the sort that led to the pasta dispute to worsen in the United States and elsewhere. “The pressures on Capitol Hill will be for more protectionism because our trade deficit will almost assuredly widen,” from the record of SUSI 23 billion (5259.5 billion) that it reached last year, he said. Protectionism was spreading elsewhere, too, especially among the developing countries. To rehabilitate their economies, many of those countries now discouraged imports. “The composite of all that is a very heavy dose of protectionism everywhere,” Mr Yeutter said. He “absolutely” opposed a broad surcharge on imported goods that many congressmen support but he endorsed the Reagan Administration’s view that Japan and Europe should do more to stimulate their economies and thus increase their imports of American goods..