E.U.'s Fischler voices concern on wheat gluten quota change

by Emily Wilson
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BRUSSELS — A tightening of the import quota on wheat gluten from the European Union "would wreak further havoc on trade relations between E.U. suppliers and U.S. customers," E.U. Commissioner for Agriculture Franz Fischler recently warned.

Mr. Fischler expressed "dismay" over reports that the United States intends to tighten the quota on wheat gluten from the E.U. for the year starting June 1. He said that with the E.U. already challenging the quota through the World Trade Organization, a move by the United States to further restrict wheat gluten imports was "most inopportune."

"The lack of competitiveness of U.S. wheat processors on the domestic U.S. market will not be resolved by altering the operation of the wheat gluten quota," Mr. Fischler said.

According to the European Commission, the proposed restriction by the United States "would appear to divide the E.U. quota into fourths, with applications required for each quarter." The Commission said that with the next quota period scheduled to open June 1, it would be difficult to cut the E.U. quota by 75% at this stage and that it would prove difficult for U.S. Customs "to allocate licenses in a fair manner and not to disrupt trade."

Mr. Fischler said, "Quadrupling the complexity of quota management would seem to increase the risk for error, especially in light of the failure of U.S. customs to record declared imports properly against the E.U. quota in 1999."

The United States in May 1999 cut the E.U. wheat gluten import quota for the June 1, 1999-May 31, 2000, year by 20% after determining that imports exceeded the quota set for the first year of the three-year quota.

The quota for E.U. wheat gluten in the June 1, 1998-May 31, 1999, period was 54 million lbs. The second-year quota was reduced to 45.3 million lbs from the original level of 57.2 million lbs. The quota for the year beginning June 1 is 60.6 million lbs.

The W.T.O. established a dispute panel on the wheat gluten import issue last July after the E.U. complained that the import quota violated the W.T.O. Safeguards Agreement. The United States argues that the quota was justified under the Safeguards Agreement because imports from the E.U. had undermined domestic wheat gluten prices.

The E.U. has stated that in compliance with the W.T.O. agreement, it will impose a tariff on corn gluten feed imports from the United States if the U.S. extends its quota on E.U. wheat gluten imports beyond May 31, 2001.

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