U.S., Europe Agree to Settle Trade Conflict

The United States and the European Communities resolved a longstanding dispute Sunday over trade in citrus fruit, pasta and other food items, the two sides said.

“Both sides are delighted to have a 16-year-old dispute behind us. It augurs well for the future of U.S.-EC trade relations,” U.S. trade representative Clayton K. Yeutter told reporters after two days of talks with top officials of the 12-nation European Communities, also known as the Common Market.

Willy de Clercq the market’s commissioner for external relations, said on Belgian radio that both sides “worked out a package of products on which we will lower our duties or increase our (import) quotas and where the other side too will . . . either raise quotas or lower duties.”

“We did make concessions concerning orange, lemon and almond (trade) and (the United States) did make concessions concerning certain cheeses, olive oil and olives,” De Clercq said.

Details Undisclosed

The package “has to advance the trade in these products,” he said.

De Clercq did not elaborate. Neither side released details of the accord.

“It has been a long, difficult series of negotiations,” Yeutter told reporters.

In a joint statement, the two sides said the United States immediately will roll back higher duties it imposed last November on Common Market pastas, while the market will reduce its duties on U.S. walnuts and lemons, which it raised to retaliate for the higher pasta penalty.

“At a later stage, both sides will implement a series of reciprocal measures which will further liberalize EC-U.S. trade,” the statement said.

Washington also is to unblock a steel accord negotiated earlier this year allowing Common Market producers to ship more semi-finished steel products to the United States.

Approval Expected

The package will be submitted Monday to Common Market members, who are expected to approve it, said a market official who spoke on condition of anonymity.

“We believe (the agreement) is well-balanced, satisfactory and meets the needs of both parties,” Yeutter said.

The dispute over U.S. citrus exports to the Common Market began when the European trade bloc decided to lower its tariffs on citrus fruits coming from 11 non-member Mediterranean countries, including Israel, Morocco, Algeria and Tunisia.

Washington said the policy hurt U.S. citrus exports to the European Communities. The bloc claimed that the preferential policy was intended to help the Mediterranean countries develop.

“We aid these countries in their economic growth, and as a consequence in their political stability,” De Clercq said last week.

Communities sources said last month that in return for widening U.S. access to the European citrus market, the bloc wanted equivalent concessions from the United States.

Complaints on Subsidies

The pasta dispute began in 1981, when American pasta makers claimed they were hurt by Common Market subsidies of pasta made in Italy, a market member.

Last November, after years of mediation and direct negotiations failed to settle the dispute, the United States retaliated by placing high tariffs on Common Market pasta exports. The Europeans then responded with higher tariffs on U.S. lemons and walnuts.

The joint statement said the two sides have found “a modus operandi for reaching a prompt and mutually satisfactory solution on pasta.” Details were not released.

The tariffs on walnuts hit California farmers hard because virtually all U.S. walnuts are grown in the state. The Common Market’s move, which came during the prime Christmas selling season, cost California walnut growers an estimated $24 million in lost sales.

The agreement, involving trade worth more than $1 billion a year, removes a major obstacle to the launching of a new round of global trade talks next month in Punta del Este, Uruguay, Common Market officials said.

The Reagan Administration has emphasized the importance of a new round of international trade talks under the General Agreement on Tariffs and Trade and in halting a trend toward protectionist measures, particularly in Congress.