Sir Roy Denman, Head of the ECDelegation in Washington, said pending U.S. trade legislation
is a misguided attempt to deal with the nation's trade deficit
and will spark retaliation if passed in its present form.
    "To think that you can deal with a trade deficit by
legislation is a mistake," he told the Foreign Trade
Association here.
    Denman told reporters that possible retaliation, which he
warned of in a letter to House Ways and Means Committee
Chairman Dan Rostenkowski, would not necessarily be on a
product-for-product basis.
    "Retaliation does not have to be matched product to
product," Denman said.
    He said in the case of textiles import restrictions,
however, retaliation would be against U.S. textile exports.
    "Certainly, if restrictions were imposed on European
exports of textiles to the U.S., the Community would be likely
to retaliate with restrictions on U.S. textile exports to
Europe," Denman said.
    He also took exception to U.S. proposals to require
countries with large current account surpluses with the U.S. to
cut those surpluses or face special tariffs.
    "This would conflict with international obligations, throw
a large wrench into the current round of trade negotiations and
could easily boomerang," he warned of the tariff proposals.
    Denman also took exception to U.S. efforts to seek
reciprocity in specific trade sectors.
    "Forcing reciprocity in one sector by imposing barriers
would simply lead to retaliation from the other party," he
said, adding that overall reciprocity can only be achieved by
trading off disadvantages in one sector for advantages in
another.
 Reuter
