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Iraq dispute may spark U.S.-EU trade spat

WASHINGTON, March 4 (UPI) -- Anti-French sentiment in the United States, and growing hostilities towards U.S. foreign policy in Europe could potentially hurt trade relations between Europe and the United States, the European Union's top trade official cautioned Tuesday.

Speaking to reporters after his two-day visit to the nation's capital, EU trade commissioner Pascal Lamy stressed that while he met with no hostility regarding European products either from administration officials or from lawmakers this time around, he was nonetheless concerned that "there may be a danger" for such ill feelings to be adversely reflected in trade relations across the Atlantic.

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"This is a challenging international environment ... a difficult geopolitical situation" as the United States prepares for a war against Saddam Hussein's regime. France, together with Germany, has been particularly vocal in their opposition against the Bush administration's determination to attack Iraq even without support from the United Nations, if need be. But French opposition to Bush's rallying cry for war against Iraq has antagonized many U.S. business owners, some of whom are calling for a boycott against French products.

So far, there has been no anti-French or indeed anti-European campaign by any large corporation, but some lawmakers have already suggested that manufacturers make clear that their products come from France or Germany, so that consumers can boycott those goods should they so choose.

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"There needs to be precaution ... not to have contamination" of politics hurting trade relations, Lamy said. He added that the primary concern of trade negotiators was to provide businesses with stability, transparency, and predictability. And while there was yet no sign of political terseness affecting bilateral trade relations, he would remain vigilant of the possibility in the future.

But while trade relations between the EU and the United States have often been tense, often focusing on one particularly sticky issue, both Lamy and his counterpart, U.S. trade representative Robert Zoellick, have focused more on stressing the two sides' mutual commitment for free trade, particularly at a multinational level through the World Trade Organization.

"We both recognize this is a time of international tension and uncertainty," said Zoellick at a joint press conference with Lamy late Monday, following his bilateral discussion with the trade commissioner.

Yet that is not to say that there are no points of contention between the two sides. One key concern remains the EU's continued boycott of genetically modified foods from the United States. U.S. critics have argued that the EU's ban of modified foods is preventing developing nations from buying U.S. crops, as African countries in particular fear that the European markets would not accept their products should they allow genetically altered food into their markets.

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