EC, U.S. REMAIN DIVIDED OVER PASTA DISPUTE
  Top-level talks last week between the
  European Community (EC) and the United States failed to resolve
  a dispute over pasta which may provoke new trade frictions next
  month, diplomatic sources said.
      The U.S. Insists the EC complies with what it regards as an
  unambiguous ruling from the world trade body GATT and
  dismantles an export subsidy system which has led to Italy
  taking an increasing share of the U.S. Pasta market.
      The sources said the EC, which currently provides subsidies
  of around 16 cents a pound, offered a compromise in last week's
  talks in Brussels but that this was rejected by the U.S.
      U.S. Assistant Special Trade Representative Jim Murphy has
  returned to Washington ahead of a theoretical July 1 deadline
  for agreement, set last August when the two sides resolved a
  related dispute over EC restrictions on U.S. Citrus imports.
      The diplomatic sources said the citrus issue could be
  reopened if the pasta dispute was not solved quickly. It was
  also possible the U.S. Would reimpose a 40 pct tariff on EC
  pasta, lifted when the citrus row was settled.
      But the two sides may agree to extend the deadline for a
  few days as EC Commissioners Willy de Clercq and Frans
  Andriessen are due to visit Washington from July 7 to 10.
  

