Cook to meet with Albright on trade war

THE FOREIGN Secretary, Robin Cook, will hold talks today with the US Secretary of State, Madeleine Albright, to try to defuse the worsening trade dispute over bananas.

The Foreign Office said Ms Albright, returning from a visit to China, would stop for several hours in Britain for the meeting. It comes after the World Trade Organisation said it was to hold emergency talks on Monday over the crisis.

The US ambassador to London, Philip Lader, was summoned to the Foreign Office and carpeted for the second day running and France joined the condemnation of the American action, which doubles the cost of importing a range of European goods.

Brussels is pursuing two complaints at the WTO after Wednesday's decision by the Clinton administration to instruct importers of European goods worth up to $520m (pounds 320m) to post bonds to cover a 100-per-cent tariff, if it is imposed.

Monday's meeting of the WTO general council will provide a forum for a debate on the US action. It will, said a spokesman for the European Commission, "increase diplomatic and political pressure on the US to play by the rules".

At the same time the EU has asked the WTO for "urgent consultations". These will allow the trade body to invoke an accelerated process under which the US and the EU would have 20 days to try to settle their differences bilaterally over the sanctions. If they fail, the EU could ask the WTO to rule on the US sanctions.

Tony Blair, speaking on a visit to Scotland, said that he had held "a very constructive" telephone call with President Bill Clinton on Thursday amid fears that the sanctions threat could develop into a full-scale trade war.

"We are also going to sort it out within the European Union as well as with the US," the Prime Minister said, "so I will be making a lot of calls in the next few days."

But there was little sign of conciliatory language as the Government summoned the US ambassador in London for the second time in 24 hours.

The Foreign Office minister Baroness Symons expressed "shock and concern at the US decision to launch export restrictions before a WTO ruling on the EU's revised banana regime".

Mr Lader insisted that Washington would work hard with Britain to resolve the dispute. "We're working towards finding an amicable solution, one that is consistent with WTO rules," he said.

The French Foreign Ministry issued a statement "deploring" what it called the unilateral action of the Americans. "We call on them to show good faith and to reverse an unacceptable decision," the statement said.

After a meeting between Sir Leon Brittan, the EU trade commissioner, and Stephen Byers, Secretary of State for Trade and Industry, Mr Byers said they had "agreed that it was important to maintain our protests at the unilateral action of the US. In addition, steps will be taken at the WTO to get the sanctions lifted."

The extension of the long-running dispute follows the failure of WTO arbitrators on Tuesday to rule on whether the US was entitled to compensation or to impose sanctions in retaliation for the EU's banana import regime.

On Wednesday the US declared a list of products that will be liable to 100 per cent sanctions, though such action is suspended until the WTO arbitrators' report is ready.

The US believes the EU banana import regime is unfair to South American distributors, most of which are owned by American companies, because the policy allows preferential treatment to former European colonies, such as the Windward Islands.

Brussels says 78 per cent of banana imports into the EU come from Latin America, which provides 62 per cent of consumption to Europe as a whole. It says that without access to European markets, the economies of Caribbean islands will be devastated, with increasing economic pressure for production of drugs.

Letters, Review, page 2