French victory threatens US

Date: 21/12/1995

By Michael Mann

AMERICAN exports to the EU worth over a billion ecu have been threatened by French success in overturning a Commission decision resulting directly from the 1992 Blair House farm trade accord.

The European Court of Justice found in favour of France's claim that the Commission had misused its powers in amending a customs tariff heading to allow corn gluten feed imports into the EU duty-free. France argued that because the shipments contained maize, they should fall under a customs tariff on which duty is payable.

Imports of the substance, which is used as a low-priced alternative to cereals in animal feed, are worth at least 1.3 billion ecu every year. The main exporter is the US, to whom the trade is of considerable importance.

France claimed successfully that the Commission's authority to clarify the definition of customs codes did not give it the power to adjust the substances covered by a particular code.

The Commission argued that corn gluten feed, which has been imported duty-free since 1967, remained basically unchanged in content, with the only difference being the vast improvement in testing methods.

It remains unclear how the Commission intends to respond to the Court's judgement. Apart from provoking probable trade retaliation from the Americans, already upset over a number of farm-trade issues, the imposition of duties would push up feed prices for EU farmers.

Commission officials pointed out that it was too early to speculate if corn gluten would be reclassified under an alternative duty-free heading. “We'd probably have to go to the Council of Ministers to do this,” a Commission official said.

The issue is certain to be raised when US Agriculture Secretary Dan Glickman meets Agriculture Commissioner Franz Fischler in Brussels on 10 January.