AMERICA WARNED OF DRUGS DANGER OVER BANANA WAR

The Caribbean is highly dependent on the banana trade.

Leaders of the 15-strong Caricom group of countries are threatening to
abandon a 1997 trade and security agreement under which American law
enforcement agencies can pursue suspected drug traffickers into their
territorial waters and air space.

Underlining this threat, Nigel Gardner, spokesman for Sir Leon Brittan, the
European Trade Commissioner, said that if their banana trade was imperilled,
Caribbean countries would "move towards the most easily available
alternative".

He added: "There is a risk of driving these countries into drug production
and that is not in anybody's interests, least of all the United States."

No decisions emerged from yesterday's Geneva summit.

An official said members of the 134-strong WTO general council not concerned
directly in the dispute had generally "upbraided" America for its actions.

A number of national delegations also voiced concern at the extent to which
the issue was being allowed to dominate the world trade agenda.

Roderick Abbott, the EU trade ambassador, told the meeting that the American
sanctions were "unjustified, unauthorised, unlawful and unacceptable". This
was dismissed by Rita Hayes, his American counterpart.

America accuses Europe of discriminating unfairly against the largely
US-owned banana producers of Latin America in favour of its former colonial
interests in Africa and the West Indies. Provisional sanctions of UKP325
million have been imposed on European goods ranging from cashmere clothing
made in Scotland to Italian pecorino cheese. The Clinton administration says
that Europe has failed to implement WTO instructions to make its banana
import policies compatible with world trading rules. Europe rejects the
charge, and says that a revised regime introduced on Jan 1 takes full
account of American concerns.

Tony Blair has already sought to exploit his close relationship with
President Clinton, calling for the sanctions to be lifted immediately. But
Washington is under acute domestic pressure to retaliate against what it
perceives to be trade violations.