EC, U.S. REMAIN DIVIDED OVER PASTA DISPUTE
Top-level talks last week between the
European Community (EC) and the United States failed to resolve
a dispute over pasta which may provoke new trade frictions next
month, diplomatic sources said.
    The U.S. Insists the EC complies with what it regards as an
unambiguous ruling from the world trade body GATT and
dismantles an export subsidy system which has led to Italy
taking an increasing share of the U.S. Pasta market.
    The sources said the EC, which currently provides subsidies
of around 16 cents a pound, offered a compromise in last week's
talks in Brussels but that this was rejected by the U.S.
    U.S. Assistant Special Trade Representative Jim Murphy has
returned to Washington ahead of a theoretical July 1 deadline
for agreement, set last August when the two sides resolved a
related dispute over EC restrictions on U.S. Citrus imports.
    The diplomatic sources said the citrus issue could be
reopened if the pasta dispute was not solved quickly. It was
also possible the U.S. Would reimpose a 40 pct tariff on EC
pasta, lifted when the citrus row was settled.
    But the two sides may agree to extend the deadline for a
few days as EC Commissioners Willy de Clercq and Frans
Andriessen are due to visit Washington from July 7 to 10.
 REUTER
