American soybean producers and processorsare hoping the proposed EC tax on vegetable oils and fats will
not be imposed, but say the U.S. Is prepared to retaliate if it
is introduced.
    Wayne Bennett, the American Soybean Association's first
vice president, told a news conference the U.S. Administration
would not hesitate to retaliate, but both producers and
processors were trying to solve the issue through negotiation.
    U.S. Secretary of Agriculture Richard Lyng said in a letter
to EC officials that U.S. Retaliatory measures would cover more
than agricultural products if the tax was imposed, Bennett
said.
    The ASA and National Soybean Processors Association (NSPA)
delegations will meet top West German government officials
today and tomorrow to lobby for support.
    Bennett said West Germany, Britain, the Netherlands,
Denmark and Portugal oppose the tax, but Italy and Belgium seem
to have taken a hardline view on the issue.
    "Europeans in favour of the tax say it would be to their
advantage economically, but that is not correct because we
would hit back," NSPA chairman Jack Reed said.
    This step would be very expensive for all and no one would
emerge as a winner if the tax were introduced, he said.
    Reed pointed out the U.S. Administration and the soybean
industry view the EC proposal as violating the General
Agreement on Tariffs and Trade.
    The proposed tax also violates the zero duty bindings
agreed between the EC and U.S. In 1962, he said.
    Under the zero duty bindings pact U.S. Soybeans and
products can be exported to the Community duty-free.
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