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Australian state ready for

economic war with Paris

SYDNEY: An Australian state government said

on Monday it was ready to start "economic warfare" with France

over its nuclear testing but called on Australian Prime Minister

Paul Keating to also step up Canberra's economic sanctions.

New South Wales, Australia's most populous state, said it

was prepared to ban Franco-German firm Eurocopter from bidding

for a A$4.5 million (US$3.3 million) contract to supply three

police helicopters.

State premier Bob Carr said he would ban Eurocopter, a joint

venture between France's Aerospatiale and Germany's Daimler-Benz

Aerospace, if the Keating government agreed.

"We are happy to open economic warfare between Australia and

France by cancelling, what is in overall terms, a relatively

modest contract," Carr told reporters in Sydney.

"Now, I am happy to do that if that is the wish of the

Australian government," he added.

"But I want them to say they are willing to up the ante and

go well beyond cancelling defence contracts," Carr said.

The Australian government has banned French defence firm

Dassault Aviation from bidding for a A$1.0 billion ($740

million) contract to supply jet aircraft. Defence Minister

Robert Ray has said state governments should follow suit.

The move prompted Paris to recall its envoy to Canberra and

threaten economic reprisals. Last week, the brawl claimed

another major casualty with the French owner of Sydney-based

pest control firm W.A. Flick & Co selling out to Dutch investors

due to anti-French sentiment.

The Victorian state government has already banned French

firms from bidding for a slice of its electricity privatisation

programme, worth up to A$13 billion ($9.6 billion).

Carr said he would write to Keating asking him if banning

Eurocopter was consistent with Australia's foreign policy.

Carr said legal advice to his government warned that

blocking Eurocopter could result in a damages claim by

Eurocopter. Tenders to supply the helicopters closed on July 21.

Opposition in Australia and New Zealand to France's decision

to resume nuclear tests in the South Pacific is growing daily,

with big rallies held across both countries on Sunday, the 50th

anniversary of the bombing of Hiroshima.

Protesters used the occasion to attack French President

Jacques Chirac, who in June announced Paris would hold eight

tests in French Polynesia between September 1995 and May 1996.

The Australian government on Sunday announced two political

delegations would head to Europe in September to seek support

against France's nuclear policy.

France was Australia's 14th largest trading partner in 1994,

with Australian exports worth A$762 million ($563 million) and

French imports worth A$1.64 billion ($1.05 billion).-Reuter