U.S. trade representative ClaytonYeutter today said that if the European Community's Council of
Ministers approves a tax on vegetable oils and fats, another
major transatlantic trade row will erupt over agriculture.
    In a statement issued by the trade representative's office
following a speech to the American Soybean Association's board
of directors, Yeutter said the proposed tax would have a severe
impact on American soybean farmers, who export some 2.4 billion
dlrs in soybeans and products annually to the EC.
    "This is an unacceptable situation for us and its
(vegetable oils tax) enactment would leave us no choice but to
vigorously protect our trade rights and defend our access to
the European market," Yeutter said.
    Yeutter said the proposed vegetable oils tax would violate
EC obligations under the GATT.
    He said the effect of the tax would be to double the price
of soyoil produced from imported soybeans, making margarine
made from soyoil more expensive than tallow-based margarine,
and closer in price to expensive European butter.
    "I am astonished that the EC commission would propose such
a provocative measure so soon after we successfully resolved
the agricultural dispute over the enlargement of the EC to
include Spain and Portugal," Yeutter said.
    "It serves no purpose to embark on another confrontational
course before the recent wounds have healed and as we are
beginning to make progress on the Uruaguay round (of global
trade talks)," he said.
 Reuter
