EC Calls California Recycling Law a Trade Issue : Commerce: The statute, which requires that a percentage of glass sold in the state be recycled, is cited as 1 of 8 recent U.S. trade barriers.
California’s new glass recycling law on Thursday became the latest object of the intensifying trade spat between the United States and the European Community.
The EC’s annual report on U.S. trade practices lists the recycling law as one of eight barriers erected the past year. “Europeans still encounter many serious problems in doing business in the American market,” the EC says in its 96-page report.
The California law says glass containers produced or sold in the state for food and drink must be made of at least 15% recycled glass as of this year, rising gradually to 65% in 2005.
That rule, when applied to imported glass, does nothing to improve California’s environment, the EC report asserts. Instead, the Europeans argue, the California measure improperly projects the state’s environmental standards on other countries in violation of rules of the General Agreement on Tariffs and Trade, which governs international commerce.
The California law already applies to imported glass containers. But the state is still trying to solve the technical difficulties of enforcing the law against foreign and out-of-state manufacturers.
Sales of European glass containers for food and beverage in the United States totaled $10 million in 1991, 10% to 15% of which are sold in California, according to the Glass Packaging Institute, a U.S. industry group.
The EC report warns that similar recycling legislation at the federal level had been introduced in the Senate and the House.
“It’s clearly within our right and responsibility to protect our environment,” Mark Murray, policy director of the Sacramento-based environmental group Californians Against Waste, says of the EC report.
The group, which was instrumental in drafting California’s recycling laws, also objects to any exemption for imported glass that could put California manufacturers at a disadvantage because of the currently higher cost of using recycled glass.
Absent from the EC report is any reference to one of the hottest U.S.-EC trade disputes: subsidies to aircraft manufacturers. EC officials insist--despite reports to the contrary--that neither side had reopened the tentative agreement reached last week to limit government subsidies. The United States has formally charged EC governments with subsidizing production of its Airbus jets; the EC in turn says Boeing and McDonnell Douglas receive indirect subsidies from the Pentagon and NASA.
The EC report also devotes little space to U.S. farm subsidies--including the $500-million-a-year water subsidy program for California’s Central Valley--which the EC charges make American agricultural goods artificially cheap on world markets.
The EC runs its own, more far-reaching program of agricultural subsidies, and its refusal to meet the U.S. demand to dismantle it has deadlocked six years of negotiations aimed at liberalizing the world’s trading system.
According to the report, the United States ran a $17-billion trade surplus with the EC last year. The EC bought 30% of U.S. exports, the report says, while only 18% of EC exports went to the United States.
“The political relationship between the U.S. and the community is too much dominated by U.S. domestic concerns about America’s competitiveness and America’s place in the world,” the report says.
The EC report expresses concern over an increase in legislation introduced in Congress to authorize unilateral action against U.S. trading partners deemed to be engaging in unfair practices.
Such practices, the report says, should be adjudicated by GATT, the Geneva-based body that oversees the world’s trading system. “Europeans are perplexed and worried about the U.S.’ commitment to the open trading system,” the report says, echoing a review last month by the GATT itself.
The eight new trade barriers listed by the EC include the U.S. law barring tuna caught by nets of mesh so fine that they trap dolphins as well. The law, aimed primarily at Mexico, also bans imports from countries that buy from Mexico, including EC members Italy, Spain, France and Great Britain.
“We’re being asked by Congress to coerce a third nation (Mexico) because the American voters want it,” says John Richardson, who heads the EC office for U.S. relations. “That is unacceptable.”
Roderick Abbott, a top EC trade negotiator, expresses particular alarm over the “growing tendency” of the United States to make bilateral deals with Japan and other trading partners--deals, he says, that tend to squeeze out the EC and other trading partners.
EC officials did not complain about the U.S. free trade agreement in force with Canada and under negotiation with Mexico. The 12 EC nations themselves will tear down internal barriers to trade at the beginning of 1993.
