US Issues Further Warning Against Steel Tax Retaliation

by Mike Godfrey, Tax-News.com, Washington

02 May 2002

The Office of the United States Trade Representative (USTR) issued a further warning to Japan and the European Union over possible retaliatory action ahead of today's EU-US summit meeting.

In a statement released on Monday, the USTR again warned against imposing prohibitive tariffs on certain US imports under WTO safeguard mechanisms. This follows a request to hang fire made to the Japanese government by US Trade Representative, Robert Zoellick, last week. Japan last week gave the United States until May 17 to offer compensation.

'A review of 32 WTO safeguard cases over eight years shows only one example of a country unilaterally retaliating against a safeguard measure that a WTO member imposed prior to a WTO ruling,' the statement revealed, continuing: 'That retaliation, by Poland against Slovakia's safeguard on imported sugar, prompted such widespread criticism among WTO members that Poland quickly withdrew its retaliation.'

The US Trade Representative's Office argued that immediate pre-WTO ruling retaliation would be 'unprecedented' in the history of the WTO's dispute settlement procedures, and that for either of the aggreived trading partners to take unilateral action would be: 'to ignore the dispute settlement process, which both Europe and Japan have vigorously defended in dispute settlement cases before the WTO.'

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