Blair offers to repair rift
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March 5, 1999: 9:38 a.m. ET
British Prime Minister will use friendship with Clinton in attempt to avert trade war
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LONDON (CNNfn) - British Prime Minister Tony Blair has promised to use his special relationship with U.S. president Bill Clinton to avert an impending transatlantic trade war.
The U.K. leader said in a radio interview that he would do all in his power to try to persuade the U.S. to lift the threat of import tariffs against a number of European luxury ranging from Scottish cashmere sweaters to pecorino cheese. He said he believed his relationship with the American president could play a vital role in solving the so-called "banana dispute."
"I get on very well with him . . . and I think the British-U.S. relationship is a very important one. When things like this come up it's important to have that relationship," Blair told a radio program.
Blair also promised that the U.K. government will compensate Scottish cashmere exporters hit by the U.S. decision to raise tariffs on their goods from 6 percent to 100 percent.
The move came as the European Union called for an urgent meeting of the World Trade Organization to tackle the dispute. In its filing to the trade body, the EU accused Washington of "irresponsible unilateral action" and a "blatant disregard" of WTO dispute procedures, Reuters reported.
The proposed U.S. trade sanctions would cost EU producers up to $520 million a year. But experts warn the dispute could escalate with disastrous consequences.
"The system could conceivably lose much of its credibility and if not collapse then fail to be as effective as it's been, which could be very damaging because we have built this system to try to avoid the law of the jungle in international trade," said Iain MacVay, a trade lawyer at consultants Rowe and Maw in London.
Blair promised to make "a lot of calls in the next few days," and described a telephone conversation with Clinton Thursday as "very constructive." He added, "We are also going to sort it out within the European Union as well as with the U.S."
MacVay pointed out that both sides need to shift from their current positions. "I do think the Americans are wrong with what they are doing at the moment but the Europeans have maintained a regime that is inconsistent with the WTO for quite a long time and they have not been very quick to accept the rule of law and change the regime.
"The Americans have a pretty good record at doing just that, so to some extent they feel that the Europeans are not playing ball," he said.
-- from staff and wire reports
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