To: long-gone who wrote (59218 ) 10/1/2000 11:09:46 PM From: Rarebird Respond to of 116958 U.S. and EU postpone trade showdown Saturday, September 30, 2000 11:58 PM EDT WASHINGTON, Sept. 30 (UPI) -- With the deadline for the start of a multi billion dollar trade war only hours away, the United States and the European Union Saturday agreed to postpone the showdown. The two sides gave themselves until Nov. 1 to resolve a disagreement over a U.S. trade subsidy delivered through Foreign Sales Corporations ruled illegal by the WTO. Had the agreement, negotiated by the U.S. Trade Representative office and the European Union, not been forthcoming by the midnight deadline, the EU could have published a list of U.S. products worth $4 billion a year subject to penalty tariffs without returning the case to the World Trade Organization. Without addressing the merits of either side's arguments, the United States and the EU agreed to postpone the showdown for a month, to allow the U.S. Congress to alter the disputed subsidy program and for the EU to ask for a WTO review. In a statement distributed by the U.S. Trade Representative's office Saturday, the U.S. said that both sides "demonstrated a commitment to avoid escalating trans-Atlantic trade tensions." The dispute may not fade for long, however, since the EU has already objected to the changes made in the trade program in legislation moving through the U.S. Congress, the second U.S. attempt this year to meet WTO criteria. The fact that the U.S. is already imposing nearly $200 million worth of sanctions against the EU in a separate dispute involving banana trade also is indirectly raising the intensity of the dispute over Foreign Sales Corporations. The United States has administered about $4 billion in subsidies over the past decade and a half through the program, and some EU based companies have objected strenuously. The United States lost its bid to keep the program without change when a WTO panel called the FSC practices impermissible. The U.S. House has passed its version of FSC changes, but it does not agree with the version about to be voted on by the U.S. Senate. The legislation would actually increase the amount spent on the subsidy, but allow EU based companies to participate. (c) 2000 UPI All rights reserved. -0- Copyright 2000 by United Press International. News provided by COMTEX comtexnews.com