Arguments at the World Trade Organisation over American restrictions on European Union exports of a key wheat by-product used in food processing are set to intensify, with the tightening of already restrictive import quotas for wheat gluten by the US government.
A disputes panel was set up at the WTO last year to adjudicate on the matter. It has the power to order the US to open its markets to EU gluten, if it deems that the American restrictions break world trade laws, as agreed at the last main GATT agreement, following the Uruguay Round.
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The row is also set to sharpen debates at the WTO in the early stages of a new round of discussions on the trade in agricultural goods, which were launched quietly at Geneva earlier this year, after the disastrous WTO summit in Seattle last November failed to agree an agenda.
EU agriculture Commission Franz Fischler has attacked the recent tightening of the wheat gluten quota, which was due to come into force this month. He called the restriction “most inopportune,” adding: “I deplore this unnecessary action, which further discriminates against the EU industry. The lack of competitiveness of US what processors on the domestic what market will not be resolved by altering the operation of the wheat gluten quota.”
The row dates back to May 1998, when the US imposed a temporary ‘safeguard’ quota limit of 24,513 tons of EU gluten exports. This was cut by more than 5,000 tons last May and this month, the US government has split the annual quota into four, telling EU exporters to apply for import licences covering a quarter of the annual amount every three months.
Dr Fischler said that the latest move would “wreak further havoc on trade relations between EU suppliers and US customers and lead to greater complexity in the management of the quota.”
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