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US threatens to take tough bargaining stance against Europe
WASHINGTON, Feb 2: The Clinton administration took a tough bargaining stance in its first major trade dispute by announcing that next month the federal government would stop purchasing a wide range of products made in Europe, reports AP.
The halt would take effect March 22 unless a compromise is reached before then.
The administration's announcement Monday immediately was branded unilateral bullying" by one European official who urged negotiation to avert a trade war between the United States and Europe.
The United States in demanding that Europe abandon rules that favor European manufacturers at the expense of foreign companies in sales to government run utilities
The US companies like General Electric and the American Telephone at Telegraph Co have complained the European rules cost them sales
The US Trade Representative Mickey Kantor said that the new administration would stop purchasing European prod ucts in the areas of telecommunications, water, energy and transportation unless there is a settlement by March 22.
The United States will act and will act firmly," Kantor said.
He also called for public comments by March 5 on a proposal to widen the retaliation against European products beyond federal government purchases.
"We stand ready to conclude an agreement, but we will not hesitate to enforce our right to be treated fairly." Kantor said In a statement.
The administration's action comes at a time when a number of American Industries from steel to autos to semiconductors are petitioning the new administration for government help in coping with foreign competition.
While Chnton insisted during the campaign that he was committed to the principles of tree trade. Republican critics in Congress have questioned that commitment given the support Clinton received from such protectionist sources as US labour unions.
The Hush and Reagan administrations rejected many, but not all. efforts to erect trade barriers on the grounds that such moves would hurt American consumers by allowing domestic producers to boost their prices while doing little to create Jobs
European officials called Monday ■ mow as Ill-advised and charged that the administration was ignoring the many buy American provisions in US law. especially at the state and local level
"1 cannot believe it is In anybody s Interests, European or American. to attempt to deal with trade .Issues In this way," said Leon Brittan, the European Community s top trade nego tiator "We do not accept this form of unilateral bullying."
Brittan said he would bring the matter up when he meets Kantor in Washington on Feb I 1 and hoped the Issue could be resolved when lower-level negotiator* meet on the subject Feb 17-18.
The administration's latest action comes on the heels of an announcement fast week that the United Slates would Impose anti dumping duties on steel imports from J9 nations, tnclud Ing seven EC members, that would effectively price their products out of the US market.
The new administration Insisted, however, that It had no choice because of deadlines In that case but to let a preliminary ruling begun by the Bush administration go Into effect.
In Monday's action, however, Kantor made clear that the tough bargaining position had President Clinton's full support. Kantor said the matter was one of the first Items taken up by the National Economic Council, the Cabinet-level group created by Clinton to coordinate economic policy
Administration officials could give no estimate of how much European trade could be affected by the move, but EC officials said that the total government procurement market in both the United States and Europe was huge, representing about 15 per cent of total output in both areas. However, in the United States much of that represents state and local spending as opposed to federal purchases.
The United States and the EC have been arguing over this issue for a year. The Bush administration also threatened retaliation but took no action.
A report from Brussels adds: The European Community is fuming over threats by the new Clinton administration to ban sales of some of its utility products and impose stiff duties on Its steel.
Some officials see the tough American attitude as an ominous sign of what may He ahead for the multi-billion dollar re lationshlp between the giant trading partners.
Foreign and trade ministries of the dozen community nations were taking stock of the situation Tuesday at a meeting likely to lead to more angry words across the Atlantic.
The attitude of the Clinton administration seems to be hardening," said French Foreign Minister Roland Dumas after the US government announced Monday plans to halt its purchases of European utility products next month.
The is clearly the first shot of the Clinton administration, said Belgian Foreign Minister Willy Claes. The United States is also Ill-served by a trade war"
The US Trade Representative Mickey Kantor said the United States was retaliating against community rules that favour European manufactures in government purchases of telecommunications and power generation equipment