EU Backs Off Steel Sanctions Against US

by Ulrika Lomas, Tax-News.com, Brussels

27 September 2002

It's reported from Brussels that a meeting of COREPER (the body formed from EU member states' ambassadors) agreed with a Commission proposal to a long-term deferment of its proposed retaliatory measures against the US steel tariffs imposed last March, but to continuance of its case against the US at the World Trade Organisation.

"The Commission has indeed invited member states to hold their fire or not fire the gun at this stage on the shortlist of sanctions on the US steel case," said Arancha Gonzalez, spokeswoman for Trade Commissioner Pascal Lamy. She added that Pascal Lamy would explain next week why he considers it absolutely crucial to contiunue to press for further exclusions from the tariffs.

Richard Mills, spokesman for US Trade Representative Robert Zoellick, said: "We are pleased to hear that the Europeans are stepping back from their threats of retaliation. As we have always said, our steel safeguards are in accordance with WTO rules," Mills said in a written statement. "If others disagree, the proper place to settle disputes is through the WTO dispute settlement process, not with unilateral retaliation."

The US tariffs have come in for widespread criticism, and are the subject of WTO proceedings brought by the EU, Japan and seven other countries. The US has already partially back-tracked on the tariffs by agreeing more than 700 exclusions which cover about a quarter of the targeted steel imports. Further movement is however unlikely until after US congressional elections set for November, and may then depend on the make-up of the new Congress.

Last week, the WTO set up an expert panel to review US complaints about quota and other safeguards imposed by the European Union in the steel dispute. The US complained that the EU had not shown that its industry was suffering, or could suffer due to an upsurge in steel imports caused by trade diverted as a result of the US tariffs.

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