U.S. RISKS DRIVING CARIBBEAN NATIONS TO DRUGS-EU

BRUSSELS, March 8 (Reuters) - A European Union official warned on Monday
that the United States risked driving Caribbean countries into drug
production if they were locked out of Europe's banana markets.

Bananas are the mainstay of Caribbean economies, said Nigel Gardner,
spokesman for European Trade Commissioner Sir Leon Brittan.

"We've always said there is a risk that if this is endangered, they will
move towards the most easily available alternative which is drug
production," Gardner said at the European Commission's daily news briefing.

"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," he said.

The United States accuses the EU of failing to comply with a 1997 World
Trade Organisation (WTO) ruling that its banana import policies favour
Caribbean growers at the expense of Latin American producers and U.S.
marketing companies.

The row escalated last week when the United States imposed provisional
tariffs on $520 million of EU exports in retaliation.

Caribbean leaders meeting in Surinam threatened on Saturday to pull out of
a security and trade treaty with the United States over its decision to
penalise EU exports. The 1997 treaty calls for closer cooperation on
anti-narcotics policies.

U.S. Undersecretary of State Stuart Eizenstat said during a Brussels visit
last month that Washington did not object to Caribbean countries getting
preferential treatment, provided the EU's banana policies complied with WTO
rules.

"After all, the Caribbean countries are our neighbours. If their economies
are hurt, it will hurt the United States much more than it will Europe,"
Eizenstat said.

The EU called a meeting of the WTO's ruling General Council in Geneva on
Monday to seek support for its position that the United States broke WTO
rules by imposing provisional tariffs.

"What we are hoping for (from Monday's meeting) is substantial political
pressure on our side...," Gardner said.

British Foreign Secretary Robin Cook said after talks with U.S. Secretary
of State Madeleine Albright on Saturday that Britain and the United States
agreed on the need for urgent EU-U.S. talks to resolve the banana row.

WTO chief Renato Ruggiero on Monday appealed to the United States and the
European Union to settle the dispute through direct negotiations.

"Any talks, be they between the British government and the Americans, be
they between the (European) Commission and the Americans, are welcome. We
want to talk, we want to get this sorted out," Gardner said.

But EU sources said that no meeting with the Americans on the banana
dispute was currently scheduled.