U.K. AND GERMANY LEAD ATTACK ON EC FARM REFORMS
Britain and West Germany told their
European Community partners they would strongly oppose major
elements of proposals to rid the EC of its farm surpluses.
    At a meeting of EC foreign ministers, Britain called for a
full debate on a proposed tax on edible oils and fats that has
already angered EC consumer groups and unleashed Washington-led
protests from exporters to the EC, diplomats said.
    West Germany, also opposed to the oils and fats tax, will
advise the meeting formally later today it cannot countenance
other proposals that could hit German farmers, they added.
    They said West Germany's objections were put in a letter
this weekend from Chancellor Helmut Kohl to Jacques Delors, the
president of the EC's Executive Commission which had put
forward the proposals last month in a bid to avoid a new EC
cash crisis.
    Kohl reiterated German objections to proposed cereals
production curbs but reserved his harshest criticism for a
proposed dismantling of Monetary Compensatory Amounts (MCAs) -
a system of cross-border subsidies and taxes which level out
foreign exchange fluctuations for farm exports.
    Kohl made clear the dismantling would mainly hit German
farmers who, without MCAs, would find it much more difficult to
export to weaker currency states, which means virtually all
other 11 EC states, diplomats said.
    Britain initiated the discussion on the proposal to impose
a hefty tax on domestic and imported oils and fats because it
could seriously damage EC trade relations.
    The diplomats said the United States had been the most
outspoken among foreign critics of the proposal, describing it
as a breach of the EC's obligations under the world trade body
GATT.
    But protests had also come from other exporters to the EC,
such as Senegal, Malaysia, Indonesia, Brazil, Argentina,
Iceland and Norway, they added.
    Britain has often lined up against West Germany on the farm
reform issue in the past but is keen to avoid measures that
could spark a damaging trade war with the U.S.
    Foreign ministers were unlikely to take a decision on
either the oils and fats tax or the MCA proposals today,
diplomats said. But their discussion should make clear that
neither has a chance of surviving when it comes up for
substantive consideration by EC farm ministers later this
month, they added.
 REUTER
