By David Evans
BRUSSELS, Jan 19 (Reuters) - The European Commission said on Friday it would impose a retaliatory tariff on imports of U.S. corn gluten, a key animal feed ingredient, raising the stakes of the latest transatlantic trade dispute.
The five euro a tonne tariff, which will hit 2.73 million tonnes of U.S. corn gluten, will start on January 24.
It follows a decision in a separate dispute by the World Trade Organisation that a U.S. quota on EU wheat gluten, which is widely used in bakery goods, was illegal.
"Under WTO rules, we are entitled to claim compensation, and that's what we are going to do," Anthony Gooch, spokesman for EU Trade Commissioner Pascal Lamy, told journalists.
The EU imports some four million tonnes of corn gluten every year, but this figure is expected to rise in the coming months as animal feed compounders seek sources of extra plant protein following the ban on meat-based feed due to mad cow disease.
Traders said the tariff would add to already high prices due to tight supplies because cold weather in the United States had caused shipping problems.
"Of course it's going to be a problem because it's going to make the product more expensive," one Dutch broker told Reuters.
High prices had caused European feed producers to scale down their use of corn gluten recently, switching instead to soymeal and other plant proteins such as beet pulp.
ONE OF MANY TRANSATLANTIC TRADE ROWS
The wheat gluten dispute is latest in a string of transatlantic food battles to result in financial penalties.
Washington and Brussels remain at loggerheads over the EU's banana import regime and its ban on hormone-treated beef. These disputes have led to U.S. sanctions worth more than $300 million on a range of EU goods.
The wheat gluten row dates back to June 1998, when U.S. President Bill Clinton responded to a sharp rise in EU exports of the baking ingredient by imposing a three-year quota.
Between 1992 and 1997, EU wheat gluten exports to the United States almost doubled and European makers captured some 30 percent of the market in trade worth $41 million.
The U.S. industry has recently petitioned the U.S. International Trade Commission for a two-year extension of the wheat gluten quota, arguing they have not received the full benefit of the quota because EU producers have circumvented it.:
