HEADING OFF TRADE WAR

The European Community is unlikely to retaliate further in a trade war with the United States over hormone-treated meat until the world trade body, GATT, discusses the matter next month, British diplomatic sources said last Thursday. The confrontation began after the EC, in response to consumer concerns, banned imports of meat from livestock treated with growth hormones beginning Jan. 1.

Washington has insisted the hormone-treated meat is not dangerous, and it retaliated by imposing 100 percent tariffs on an equivalent volume of trade in seven types of foodstuffs, worth $100 million.

Foreign ministers of the 12-nation bloc will consider the EC position at a meeting in Brussels today.

``No one is proposing counter-retaliation at this stage,'' says one of the British sources, who declined to be identified. ``There is a very broad measure of consensus in all this.''

The sources, speaking after a meeting of senior diplomats from EC states on the issue on Wednesday, said governments would keep counter-retaliation in reserve until the GATT procedures have been pursued.

Next month's GATT council meeting will consider an EC complaint about the US decision to double the duties on selected Community food products.

``Apparently there is a very clear desire not to escalate the conflict,'' said a source at the European Commission, the Community's executive body.

But British sources say the EC wants the US action condemned by the GATT council. Failing that, the Community would initiate GATT procedures, which include setting up a panel on the issue.

``There is a lot of irritation with the Americans but also a lot of awareness that [the row] has come to a head at a particularly bad time with the change in the [US] administration and the [European] commission,'' one source said.

However, he said the realization also prevailed that the dispute should not be exaggerated. The amount of trade involved was ``pretty minuscule'' compared with the $166 billion of goods and services exchanged annually between the US and EC, he said.

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