Congress Forces Clintonites
To Issue EU Ag Trade Threats

WASHINGTON —(AP)— Under pressure from Congress, the Clinton administration published a letter Saturday outlining possible retaliation against the European Union if the EU defies an international court's rulings on banana and beef exports.

Earlier in the day, Republican leaders brought to the House floor a bill that would force the administration to sanction the 15-nation EU if it ignores rulings by the World Trade Organization. They pulled the bill, which was heading for passage, after receiving the letter from White House chief of staff Erskine Bowles.

"This is a win for free and fair trade and thousands of American workers and cattlemen across the country," said Rep. Philip Crane, R-Ill., chairman of the House Ways and Means trade subcommittee. "Trade agreements have to have teeth so that everyone plays by the rules, and that's what Congress was fighting for."

The issue grew out of concern that the EU will not abide the Geneva-based WTO's rulings that it end its trade preferences for fruit, particularly bananas, from former colonies in the Caribbean and Africa, and that the EU end its ban on U.S. beef treated with hormones.

The Europeans have until Jan. 1 to comply with the banana ruling, and until next May for the beef hormone issue.

"The European Union is threatening to undermine the rules-based trading system. They're threatening to trash the Uruguay Round (of trade talks) and the WTO," said Rep. David Dreier, R-Calif.

Opponents claim the withdrawn legislation was proposed in the waning hours of this congressional session as a favor to Carl Lindner, chief executive of the banana producer Chiquita. Cincinnati-based Chiquita has extensive operations in Central America, which along with South America would benefit from the WTO ruling.

Lindner has been a major contributor to both the Democratic and Republican parties.

In his letter, Bowles said refusal of the EU to comply with the rulings "would impair the effectiveness and credibility of the multilateral system."

He said the administration is following three tracks: pressing the EU, preserving U.S. rights in the WTO process, and considering sanctions.

After going through a process of public comment, the administration will announce on Dec. 15 its plans for retaliatory action, the White House official said. If the EU doesn't comply, those sanctions would go into effect no later than March 3.

Similar actions were planned for beef hormones, Bowles said.

But in the letter to Republican and Democratic leaders, Bowles warned Congress against trying to legislate trade policy, saying that "will have the unintended effect of undermining our ability to achieve a meaningful solution for U.S. interests rather than strengthening our hand in these cases."

Republican leaders, in a meeting with U.S. Trade Representative Charlene Barshefsky last week, asked for a letter outlining possible U.S. sanctions.

When such a letter was not produced immediately, Senate Majority Leader Trent Lott, R-Miss., and House Speaker Newt Gingrich, R-Ga., wrote President Clinton that "if the administration will not take action to protect trade agreements, Congress will have no choice but to take action on its own."