US And EU Moderate Steel Rhetoric

by Ulrika Lomas, Tax-News.com, Brussels

05 June 2002

Just one day after US Undersecretary of Commerce Grant Aldonas told EU trade officials that Washington was planning to agree a number of exclusions from its protectionist steel tariffs, the European Commission moved imposition of its planned retaliatory tariffs back until July 3.

Mr Aldonas said on Thursday after meetings with senior European Commission officials that the US exclusion decisions could benefit many European companies and "might have a significant impact" on the EU's reaction to the US steel tariffs.

He said that a number of exclusion decisions would be made "well in advance of the mid-June date by which they feel they have to make a decision. We're trying to make sure that we get as many out as early on as we can, as much for the benefit of our own consuming industry as for European or Japanese producers."

Reacting to the concession by Washington, the European Union said on Friday it would delay by two weeks its threat to impose $300 million in retaliatory tariffs against US imports, including orange juice and textiles. "It is useful and intelligent for us to keep all our options open and not provide an excuse in certain quarters for that process not to come to fruition," said the EU official, who asked not to be named.

US steelmakers which have benefited from sharp price rises as a result of the steel tariffs warned yesterday that they would fight against many of the exclusion requests, saying they were part of "an ongoing campaign to try to undermine the effectiveness" of the import protection. But Mr Aldonas said that the EU steelmakers likely to benefit from exclusions were serving "niche markets" for which no American steelmaker produces goods.

In Washington, Richard Mills, a spokesman for the Office of the United States Trade Representative, said: "From the start of the dispute over steel safeguards, we have urged the EU to consider its interests in both solving problems in global steel markets and relying on WTO rules to resolve disputes. As we have stated, unilateral trade retaliation will not benefit EU interests or the world trading system."

The US administration is far from united on the question of the steel tariffs, which were imposed in March after a fierce battle by steel lobbyists, and against the free-trading tendencies of the Commerce Department and the Trade Representative. Their more moderate counsels have since been having some effect in partially rolling back the tariffs, which have excited highly negative reactions from a wide range of countries including Australia, Russia, Japan, China and South Africa as well as the EU.

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