March 5, 1999
Web posted at: 2:49 p.m. EST (1949 GMT)

In this story: It began with bananas Range of goods affected RELATED STORIES, SITES

LONDON (CNN) -- Britain and France on Friday lashed out at Washington's plan to impose new tariffs on EU luxury goods in retaliation for the EU's restrictions on banana imports.

U.S. Ambassador Philip Lader was called to the British Foreign Office to hear London's complaint over the move by the United States to impose tariffs on EU luxury goods, pending a World Trade Organization ruling on the EU's banana quota system.

On Thursday, Lader had been summoned to Britain's Department of Trade and Industry over the tariffs -- the first time a U.S. ambassador had ever been summoned to the ministry for a protest.

British Trade Minister Brian Wilson called the U.S. action "potentially catastrophic" for the British cashmere industry, which is concentrated in Scotland.

The French Foreign Ministry on Friday also called on the United States to halt what Paris considers an illegal action by Washington.

"We strongly deplore that the U.S. has once again acted unilaterally," the ministry said in a statement. "We are asking them to show good faith and to reconsider this unacceptable decision."

It began with bananas

Friday's protest marks the latest development in a trade row that began over banana import quotas years ago.

In the early 1990s, the European Union introduced a community-wide banana import policy that hinged on giving favorable export treatment to a number of developing economies in the Caribbean, Africa and the Pacific -- many of them former British or French colonies.

The United States, backed by Mexico, Guatemala, Ecuador, and Honduras, complained about the EU policy to the WTO, which awarded victory to the plaintiffs in 1997.

The EU was given one year to change its ways. On January 1, it made amendments to its banana policy, which the EU said brings the policy in line with WTO specifications.

The United States and its backers, however, say the amended policy is no better than the old one.

The WTO is to issue a ruling on the EU's new policy in the coming weeks.

Range of goods affected

But Washington, fed up with what it sees as EU intransigence, took its own measures on Wednesday: The federal government notified U.S. importers that they are liable for hefty tariffs on $520 million worth of European luxury goods in retaliation for European barriers on banana imports.

Washington says $520 million is the sum that U.S. companies such as Chiquita Brands International Inc. and Dole Food Co. have lost because of the EU's banana quota system.

The newly-imposed tariffs affect a whole range of EU goods, from Belgian biscuits and Scottish cashmere sweaters to Italian cheese and Spanish leather goods.

European industries affected by the 100 percent tariffs are meant to price their products out of the U.S. market.

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