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BBC Scotland's Aileen Clarke reports
"The cashmere industry has found itself caught up in a trade war"
 real 56k

Thursday, 14 September, 2000, 22:42 GMT 23:42 UK
Blair wins reprieve for cashmere
Cashmere worker
Thousands of Scottish jobs depend on cashmere
By Paul Reynolds in Washington

President Clinton has agreed to delay a decision on whether to include Scottish cashmere products on a trade retaliation list following appeals from the UK Prime Minister, Tony Blair.

The list has been drawn up as part of American efforts to persuade the European Union to settle trade rows over beef and banana imports.

UK Prime Minister Tont Blair
Blair's appeal succeeded - up to a point
Mr Clinton has so far listened to the pleas of Mr Blair, who was said to have been impassioned on the issue when the two met in New York recently.

But according to American accounts, Britain has in return softened its approach in the beef and banana rows and in a newer row over tax breaks for American exporters.

'Backstabbing' warning

One American official said they did not want to punish a guy who was being helpful.

Such statements are partly designed to explain to Congress why Mr Clinton has not stepped up the pressure as it wants him to do.

British officials in Washington reject the impression being given that Mr Blair is acting as Mr Clinton's agent.

They do not want just a delay in the decision, but the formal exclusion of cashmere.

The British Government has told Washington that its helpful attitude cannot be sustained if it is stabbed in the back.

Tit-for-tat

Under World Trade Organisation (WTO) rules, the United States is permitted to impose 100% duties on a range of European products to retaliate for losses sustained because of the European banana import regime.

This favours former European colonies and not the South American plantations owned by American companies.

A similar list exists in a row over a European ban on American beef imports imposed because of alleged health fears over hormones.

The latest problem over taxes has gone the European way in the WTO, and Congress has just changed the law, although the EU says this has not gone far enough.

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See also:

25 Dec 99 | Business
Body blow for free trade
25 Feb 00 | Business
WTO slams US trade subsidy
18 May 99 | The Economy
Banana war exposes old trade divisions
24 Nov 99 | Battle for Free Trade
Policing world trade
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