Europe criticises US wheat plan

BRUSSELS - The European Community yesterday criticised a plan by the United States to increase subsidised wheat exports and questioned whether it was compatible with the spirit of Gatt world trade talks.

'The announcement was rather belligerent and doesn't help fruitful relations,' a European Commission spokesman said.

On Wednesday, the White House offered 30 million tons of subsidised wheat to 28 countries under the export enhancement programme (EEP) in the marketing year to June 1993.

The EEP programme has now been extended to countries that are traditional markets for the European Community, the spokesman said.

The huge quantity and finance involved might not be compatible with the standstill agreement on subsidies in the Uruguay round of trade talks under Gatt, the General Agreement on Tariffs and Trade.

The Gatt talks have been stalled since December 1990 over a dispute between the Community and the US over the reduction of farm subsidies.

The spokesman said the EC would watch to see that the subsidised sales were made in an orderly fashion and did not disturb world markets. But he confirmed that the EC still intended to seek a Gatt agreement by the end of 1992 and to continue negotiations.

The new offer of 30 million tons of subsidised wheat is 12 million more than EEP exports of all cereals in 1991, the spokesman said. The new sales would lift the value of US export subsidies to dollars 1bn (pounds 500m) from dollars 768m.

But the likely increase in the volume of subsidised exports this season might not be as dramatic as it seemed. 'The figures need clarification . . . we have the impression they may not really be new,' he said.

It was unclear whether the dollars 1bn offer was completely or only partially new money, he added. 'But it's important there are no new support measures.' The US exported nearly 80 million tonnes of cereals in 1991, including 32 million tonnes of wheat.

The community exported 32.2 million tonnes of cereals in 1991 but no figures for wheat exports were immediately available.

EC cereal export subsidies totalled 3.36bn ecu (pounds 2.44bn) last year.