EC shoe deal fits, but beef issue is still tough

Canada and the European Community have cooked up a deal to resolve a dispute over Canadian footwear quotas, but a similar squabble over beef quotas is nearing the boiling point.

On the footwear issue, the EC had threatened to impose extra import duties on a variety of Canadian exports to Europe worth $170-million a year in retaliation for the extension of footwear quotas to November, 1985.

Instead, Canada has agreed to reduce its import duties on a range of European goods worth about $150- million a year.

The Department of External Affairs said the deal was worked out this week by senior Canadian and European officials meeting in Brussels, but officials in Ottawa said they did not yet have a list of the imports that will benefit from the deal.

A spokesman for the permanent delegation of the EC in Ottawa said the concessions would cost the Canadian treasury about $7.7-million a year in forgone duty.

Frank Petrie, president of the Canadian Export Association, said the retaliatory measures threatened by the Europeans would have hurt many Canadian companies by making their exports to Europe prohibitively expensive. ”e’re tickled to death,” he said.

The list of products to be hit with higher duties was filed by the EC at the headquarters of the General Agreement on Tariffs and Trade in Geneva at the beginning of March. It included methanol, styrene and other chemical products, fur coats, car radios, kraft paper, needles and a variety of steel products.

The deal represents a last-minute breakthrough, because under international trade rules, the EC was free to impose the retaliatory measures within 30 days of filing the list.

It filed a second list at the same time that included $70-million worth of Canadian exports that will be hit with higher duties if no deal is reached in the beef dispute.

After European beef shipments rose from 6,700 tonnes or 11.6 per cent of Canadian imports in 1983 to 21,800 tonnes or 28.4 per cent of imports last year, Canada slapped on a quota that cut EC producers back to 2,700 tonnes or 4.1 per cent of the total in 1985.

Dietrich Hammer, head of the EC delegation in Ottawa, was scheduled to deliver a verbal note to the Department of External Affairs late yesterday to tell Canada that the beef quotas imposed in December are ”ompletely unacceptable.” However, the community has decided to give Canadians more time to think and to come up with a deal that is acceptable. ”he community will not impose the retaliatory measures on April 1,” the EC spokesman said.

But he made it clear that the ball is in the Canadian court, and refused to say how long the EC might wait before going ahead with retaliatory moves. Any such measures must be approved by the community’s Council of Ministers.

However, EC officials in Ottawa do not think the measures would run into any trouble, and would probably be approved within a day if officials decided that negotiations were going nowhere.

Canadian exports that would be affected by European retaliation include beef, pork, natural honey, maple syrup, tobacco and rye whisky.


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