America's big stick jangles EU nerves; VIEW FROM BRUSSELS

'The EU has chosen multilateralism rather than confrontation, which appears to be the US line'

Press conferences on trade matters in Brussels can sometimes be a little bit, well, boring. Since the Uruguay Round of talks wound up, a lot of the drama has gone out of the topic.

That changed last week when Mickey Kantor, the US Trade Representative, came to Brussels. His performance was enlivened by an unusual public spat with the Japanese ambassador, Tomohiko Kobayashi, who turned up to contest some of Mr Kantor's claims about the Japanese car market.

Mr Kantor, reports one television cameraman, was reduced to screwing up his notes under the lectern as he tried to remain outwardly calm. "You are trying to confuse our friends," he told the ambassador.

The incident shows how the US decision to impose tariffs on luxury cars to protest against obstacles to US exports to Japan of cars and car parts has moved swiftly onto the agenda in Brussels as well as Washington and Tokyo. The European Union is not best pleased with the way that the Americans have handled the issue; and despite parallel European difficulties with the Japanese, the incident has highlighted the differences in the way the US and the EU, under trade commissioner Sir Leon Brittan, choose to handle relations with Japan.

The commission immediately criticised the US moves, saying this was no way to solve trade disputes. "We have worked hard to establish an effective multilateral system. It seems as if what is threatened would be contrary to these rules," Sir Leon said. He argues that the problem should be dealt with multilaterally within the World Trade Organisation.

There are plenty of minor irritants in EU-US trade relations at present. Commissioner Emma Bonino, in charge of humanitarian aid (though better known for her role in the great Canadian fish war earlier this year), criticised the US embargo on Cuba when she was in Washington.

Brussels and Washington are also at odds over EU rules on bananas, which the US says hurt Latin American producers; and over a European ban on imports of fur caught with leg-hold traps.

But none of these is really a showstopper, as diplomats term the irritants that turn into real obstacles to agreement. On substance, Mr Kantor's meetings in Brussels last week seem to have gone rather well, though he cautioned the EU against becoming too inward-looking when it revises its trade rules. Behind the scenes, he and Sir Leon - old protagonists from the final days of the Gatt deal - are cooking up a new trade agreement that would expand commerce between the world's two largest trading partners. Sir Leon has talked cautiously about a free-trade agreement.

So why is the Japanese spat such a problem? First, the EU wants to make sure there is no sweetheart deal between the US and Japan to end the dispute. European carmakers have taken decades to invest in Japan and build up market share, which is five times as big as that of US manufacturers (though still pretty small). They fear that a side-effect of US pressure could be to damage this.

"In practice, it would be the Americans who benefit at the expense of European manufacturers of cars and car parts," Sir Leon said last week. "We would give very serious attention to the possibility of taking any new voluntary plan to the WTO."

There is more than a whiff of hypocrisy about this from the Americans' point of view. They point out that Europe already has a bilateral deal with Japan limiting car imports. The EU defends this by saying it aims at eliminating obstacles in the longer term, creating free trade by the end of 1999.

Second, the EU points out that the new World Trade Organisation is there to pre-empt spats like this. "I am greatly saddened that a partner with whom we have worked so hard to set up the WTO should contemplate such action," Sir Leon said.

Brussels also lobbied hard to get a European - Renato Ruggiero, a former Italian minister - in the top slot at the WTO. It cannot be far from Sir Leon's mind that the US in its present mood might apply aggressive tactics to other trading partners, including Europe.

There is third, longer-term consideration. The EU is attempting to underpin relations with Japan, and the campaign is at an important stage of development. An EU-Japan summit is planned for 19 June in Paris, bringing President Jacques Chirac, commission president Jacques Santer and Japanese prime minister Tomiichi Murayama together just after the Group of Seven industrialised countries meet in Canada. EU foreign ministers met Yohei Kono, their Japanese counterpart, last week in Paris to prepare for the meeting.

The EU likes to think (and likes Japan to think) that it is a more considerate, intelligent and engaged interlocutor than the US. "The European Union has chosen to give priority to multilateralism and to respect WTO rules rather than confrontation, which appears to be the American line," said Herve de Charette, the French foreign inister, after last week's meeting.

It also likes to think that this works. The EU's deficit with Japan was ecu24.5bn (pounds 20bn) last year, down from ecu31bnthe year before. But when Mr Chirac met Mr Kono, he emphasised that this should not be the cause of any confrontation. Rather, the EU will continue with its own track of persuasion.

In an unusual briefing last year, John Richardson, the official in the European Commission in charge of US-Japan trade ties, said the US used "megaphone" diplomacy, which risked provoking "rejectionism" on a much wider front. The Europeans use what they call the trade adjustment mechanism as a framework for talks, and have established a "regulatory dialogue", which is Europe's way of influencing Japan's own internal decisions.

By maintaining its strategy of seeking concessions through negotiation - while the US bangs on the door with the big stick - the EU clearly believes it can maintain closer ties with the Japanese bureaucracy. It also thinks it can get more results.

The next few weeks will determine whether that is really the case - or whether Sir Leon would be better employed finding a stick of his own.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected