The European Union has moved to challenge in the World Trade Organisation the US decision to penalise imports from the EU in their dispute about bananas. Some £3 million (€2.77 million) in annual Irish exports are among the $520 million (€477 million) of EU exports under threat.
As Brussels and Washington face growing tensions over a range of trade issues, EU ambassadors in Brussels demanded urgent WTO talks with the US over the retaliatory penalties.
The White House has unveiled arrangements to impose 100 per cent tariffs - or import taxes - on certain European imports. Officials announced Wednesday that US customs would immediately start requiring importers to post bonds to cover the threatened duties. Whether the duties become payable will depend on a forthcoming ruling by the WTO on the banana issue.
The row centres around the US view that the EU gives preferential access to producers in Africa, the Caribbean and the Pacific, several of them former British and French colonies. It claims the EU regime puts Latin American producers, which are dominated by US groups, at a disadvantage.
It is estimated that up to £3 million of annual Irish exports to US will be hit by the move to impose tariffs. The Government was relieved when US officials circulated the list of good to be affected and greeting cards and chandeliers were absent. They had been included on the original list submitted by the Americans earlier in the year.
However the list does include pork products, sweet biscuits, handbags, candles and cashmere sweaters. Among the companies which may be affected are Irish Biscuits, Dairygold and some smaller knitwear companies. No one was available for comment from Irish Biscuits or Dairygold last night.
A spokesman for the Department of Enterprise, Trade and Employment said the Government representatives were involved in discussions about the issue at EU level in Brussels. Enterprise Ireland has been in contact with some of the companies affected. While the £3 million of Irish goods which could be affected is regarded as small, the potential widening of the dispute is the real worry, according to Irish officials. They also point out that the US list of goods may not be the final one and other goods, like dairy products, which are exported in large volumes to the US, might come on to the list.
The atmosphere of crisis was exacerbated yesterday when the US House of Representatives threatened to ban flights of the Concorde to the United States. The proposed Concorde ban would be in retaliation for EU threats to limit the European operations of ageing US aircraft which do not meet new EU anti-noise standards.
Friction is also building after Washington vowed to retaliate against Europe if it did not comply with a World Trade Organisation ruling and drop its ban on US beef treated with growth hormones.
However, the conflict that has prompted the sharpest exchanges is over bananas. The decision to start imposing tariffs was aimed at forcing the European Union to alter its banana import policies, amended slightly after a 1997 WTO finding that they discriminated against US exporters.
In a blistering reaction, chief EU trade negotiator Sir Leon Brittan denounced the US measures as "unacceptable and unlawful", insisting that they were tantamount to punitive damages imposed without WTO authorisation.
