990706 U.S. Lamb Plan Could Harm Next Trade Round

Washington - U.S. efforts to rid the world of farm trade barriers may have suffered a setback as a result of U.S. President Bill Clinton's move to slap tariffs on lamb imports.

The White House action, coming after U.S. farmers complained that Australian and New Zealand imports were putting them out of business, involved imposing tariffs for three years.

Australia and New Zealand vowed to challenge the measure before the World Trade Organization (WTO), saying the plan unveiled on Wednesday contradicted the U.S. push for free trade in other countries.

Leaders of the two countries noted the United States was hosting the first meeting of the WTO's next round of negotiations in November.

At the talks U.S. trade negotiators plan to press the European Union and other trading partners to phase out farm subsidies, state-owned trading enterprises and other nontariff barriers.

But to international eyes, the U.S. lamb duties showed Washington was just as sensitive to domestic concerns as other capitals.

“The decision will damage the prospects of an early and successful WTO trade round,” Australian Prime Minister John Howard said in a statement. “This is a protectionist decision which sends precisely the wrong signal in the lead up to the Seattle Ministerial meeting in November.”

The topic was likely to dominate Clinton's meeting with Howard on Monday.

Australia and New Zealand were important allies of the United States in many farm trade disputes and sided with Washington in spats over biotechnology and food safety. U.S. negotiators especially depended on the countries for support in trade tangles with the European Union.

Analysts said that support may cool.

“It may be a little harder to get Australia and New Zealand to align themselves on some things that we are going after the European Union on,” said Mike Helmar, senior economist at consulting firm WEFA Group in Philadelphia.

“It becomes a political situation rather than an economic situation at this point,” he said. “We're going to get pounded on by Australia and New Zealand, and I think so justifiably.”

Helmar and other analysts said such bad feelings could be short-lived, especially because negotiations will last for years, and may be erased if the countries focus on common goals such as wider acceptance of genetically modified grains, and meat produced from animals treated with hormones. Those two issues have plagued U.S.-EU relations.

A spokesman for U.S. Trade Representative Charlene Barshefsky, Washington's top trade negotiator, was unavailable for comment.

“Like any family or any close-knit group, you'll have family spats or disagreements but the common interest overrides,” National Cattlemen's Beef Association chief economist Chuck Lambert said.

“I think this is the type of thing that we can get together and talk about the areas that we do agree,” said John Skorburg, economist and trade specialist at the American Farm Bureau.

“I wouldn't see this in the overall picture being a big detriment,” he said. “Further market access is going to be a big issue and our trading partners will be looking at it (the lamb decision) in that vein.”

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