Reagan Orders 40% Tariff on European Pasta : Retaliates for EEC Duties on U.S. Citrus
President Reagan, told that the credibility of his trade policy is at stake, ordered higher duties on European pasta Thursday to retaliate for tariffs that have limited sales of U.S. citrus in Europe.
Invoking the Trade Act of 1974, Reagan said “unreasonable and discriminatory” tariffs on U.S. lemons and oranges by the European Economic Community “have impaired the ability of U.S. citrus exporters to market their fruits in the EEC.”
Citing a need to “rebalance the level of concessions in U.S.-EEC trade,” Reagan said: “Increasing the duty on pasta imports from the EEC is a reasonable and appropriate means by which to achieve this.”
Although Reagan has been a dedicated free-trade advocate for years, a huge trade deficit and barriers erected by Japan, Western Europe and other trade partners have led the Administration to escalate its warnings of reprisals if unfair practices abroad are not ended.
Administration officials said the latest retaliation was recommended by the Cabinet-level Economic Policy Council, which concluded that a failure to respond to inaction by the EEC could erode U.S. credibility in trade matters.
Won Previous Judgment
Some of these same officials said the action was meant as a signal that Reagan, who has acknowledged mounting protectionist sentiment in Congress, is serious about tearing down trade barriers overseas.
Pasta products were chosen because the United States previously won a judgment against the EEC in that area--since ignored by the Europeans--under the General Agreement on Tariffs and Trade, the officials said.
Reagan said the EEC tariff structure, giving preferential treatment to Mediterranean lemons and oranges, has been ruled unfair and inconsistent with GATT on several occasions since U.S. producers first complained nine years ago.
Reagan said the Common Market has, since the 1960s, levied a higher duty on citrus imports from the United States than on imports from some Mediterranean countries. He said the duty on U.S. products can be as much as five times greater than that paid by other suppliers.
Beginning 15 days after Reagan signs the proclamation, expected by Monday, the Customs Service will begin collecting a duty of 40% of the current price per pound of pasta products that contain no eggs and 25% of the price of pasta products with eggs.
Egg noodles, spaghetti and other imported pasta products already are covered by a small duty of less than 1%.
The President can lower the duties or eliminate them if the Common Market countries “agree to a fair and adequate solution to the dispute,” the U.S. Trade Representative’s Office said.