CAPTAINS of US and EU industry are set to activate the early warning system in a bid to help their political counterparts avert new trade battles over everything from aerospace to leisure boats.

The alarm will be raised by more than 100 chief executive officers (CEO) from some of the world's biggest companies, who will assemble next week in Cincinnati, Ohio, for the annual Trans-Atlantic Business Dialogue (TABD). The group aims to reduce regulatory red tape which it claims is hampering EU-US trade relations.

The CEOs' warning to top politicians and officials such as Trade Commissioner Pascal Lamy and US Treasury Secretary Larry Summers comes as transatlantic trade relations continue to deteriorate amid rows over bananas, beef, tax breaks to US multinationals and subsidies to Airbus.

Conrad Eckenschwiller, the chairman of the TABD's European working groups, says eight key issues will top the chief executives' hit list of trade barriers at this year's event. These will be divided fairly evenly between those "in the US court" and those "in the EU's", according to Eckenschwiller.

Predictably, the thorny issue of economic sanctions tops the list of complaints, prompted by the controversial 'carousel' regime used by the US to retaliate against the Union for its ban on hormone-treated beef and banana import regime.

The TABD, led this year by George David of US industrial giant United Technologies and Bertrand Collomb of French construction firm Lafarge, will call for increased collaboration between EU and US assemblies - such as Congress and the European Parliament - to prevent future retaliation from escalating out of control.

The CEOs also will voice concerns about other technical issues which could eventually turn into full-scale trade disputes if politicians and policy makers are not warned in time. "Many trade disputes are fought bottom up and the top people are only informed when it is too late. The good thing about TABD is that we give warnings at the top," said Eckenschwiller.

Among the potentially explosive disputes sparked by the Union's actions are existing or proposed rules governing the use of certain refrigerants which could damage the earth's ozone layer, electromagnetic fields, vibration in heavy machinery and electronic waste. Washington is under fire for its rules governing the allocation of slots to foreign airlines, which critics claim discriminate against operators using EU-built Airbus aircraft, and standards for 'recreational marine craft'.

But Eckenschwiller insists that just because CEOs will target the US or Union in particular cases does not mean they are applying tougher, more onerous rules than the other. He added that the US and EU should work together to ensure they do not put in place conflicting regimes which leave firms on both sides of the Atlantic facing multi-billion-euro bills to comply.

Copyright 2000 The Economist Newspaper Limited. All rights reserved

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