U.S. balks at European steel duties
[March 28 2002]
By BLAIR PETHEL
BLOOMBERG

WASHINGTON -- The United States, which earlier this month imposed steel-import tariffs, is challenging a European Union decision yesterday to set its own duties of as much as 26 percent, and may ask the World Trade Organization to overturn the European Union levies, an official said.

The European Union's "safeguard" action yesterday on imports, the latest twist in what has become the biggest global trade dispute, was taken without investigation to determine whether steel imports were hurting European companies, said Richard Mills, a spokesman for U.S. Trade Representative Robert Zoellick.

"How can the EU demonstrate injury under WTO rules when the U.S. hasn't even started collecting the new tariffs and there hasn't been time for an import surge," Mills said. "Europe says one thing on steel, but does another."

The Bush administration wants consultations with the European Union in Geneva and will consider filing a WTO action, because U.S. steel exports to the European Union may be harmed, he said.

The U.S. threat comes as the European Union and other major trading partners are criticizing President Bush for levying tariffs of as much as 30 percent on U.S. steel imports to protect companies such as U.S. Steel Corp. and Nucor Corp.

The European Commission, the European Union's executive arm, warned that the U.S. action may divert steel from Latin America and Asia to Europe. The commission said it will tax 15 imported steel products to protect steel makers such as Arcelor SA from as much as 15 million metric tons of imports that may be diverted from the United States.

The European Union taxes will apply once imports exceed levels roughly equivalent to last year's.

Bush set the U.S. taxes after the International Trade Commission, a government agency, found that steel imports were hurting U.S. steel makers, 19 of which have filed for bankruptcy since 1998.

Since the announcement, the European Union, Japan and China are among the countries that have filed complaints with the Geneva-based trade arbiter asking it to rule the U.S. steel protection illegal.

Petros Sourmelis, the trade counselor at the European delegation in Washington, defended the European Union's safeguard action, saying that if Bush had not taken the "political-electoral" decision to protect U.S. steel makers, Europe would not have had to act.

"We cannot become the recipient of all the steel that would have been bound for the U.S.," he said.

The United States exported about $600 million of steel to Europe in 2001, according to Commerce Department data.

Europe is enacting its safeguard under a provision of the WTO agreement that permits such an action.

A "provisional" safeguard may be put in place for no more than 200 days in "critical circumstances where delay would cause damage which it would be difficult to repair."

Commission adopts "safeguard measures" on steel
[March 28 2002]

BRUSSELS, March 27 (AFP) - The European Commission on Wednesday adopted a series of "safeguard measures" aimed at protecting EU markets against an influx of steel exports diverted from the US after Washington imposed stiff protectionist tariffs on steel imports.

"These provisional measures... will apply to products subject to increased US tariffs and on which US imports have been increasing," said Commission President Romano Prodi.

"They will be applied in a non-discriminatory way and, in accordance with WTO (World Trade Organization) rules, will not apply to imports from developing countries."

Prodi stressed the measures were "provisional," and "in no case" would they apply "a day longer than those of the Americans."

"This is a serious issue but we should not over-dramatize its importance," said Prodi. "The EU is not seeking compensation. We are simply defending our national interests... This is our duty... and it is the right thing to do."

The safeguard measures consist of tariff's of between 14.9 and 26 percent on 15 categories of steel products whose imports into the EU exceed a specified level.

The new US steel import tariffs, imposed about three weeks ago, were set at 30 percent across the board.

European Trade Commissioner Pascal Lamy told the press conference the EU safeguard measures would go into effect on Thursday.

Prodi said the EU was "not seeking a confrontation" with Washington and was "only defending our national interests."

"Europe must defend itself and not allow its actions to be dictated," he said.

The steel conflict, said Prodi, "will not affect close relations between the European Union and the United States.

"Nonetheless," he said, "I am using this occasion to call on (US) President (George W.) Bush and his administration not to go further down this path... We must all preserve our legitimate interests, but not allow our short-term national interests to dictate policy."

"The safeguard measures are intended to protect the European steel industry against the effects of the closure of the US steel market, which has led to steel being diverted to Europe," said Lamy.

Prior to Wednesday's action, Lamy said, "We already brought the case before the WTO" and "we have started talks with the US on compensation."

"We think there's a risk of diversion of about 15 million tons (of steel to Europe), that's more than 50 percent of our requirements," he said. "We are just reacting to what the Americans have done, and we are acting in strict respect of WTO rules."

Lamy described the EU measures as "an airbag -- they will only bite if there's a real shock...As long as we don't hit the wall, everything will run pretty smoothly.

On the other hand, he said, "the Americans used the hand-brake method, taxing the very first ton of imports in hopes that that would help to cut imports and thus help to resolve the structural problems of their industry."

He reiterated Prodi's assurance that "we've gone out of our way to spare the developing countries, excluding them from these measures in a non-discriminatory way, contrary to what the Americans did."

"These measures are temporary," said Lamy, again echoing Prodi. "They will not last one day longer than the American measures."

He said the effect on worldwide steel prices would be negligible.

"Steel prices are today about 30 percent higher in the US than what they are on the European market," he said. "That's a good indication that the market is already well protected. We are not closing our markets. In 2001 we had the highest levels of (steel) imports we've ever had."

The European steel industry cheered the commission's action.

"The EU safeguards are a positive contribution to the stabilization of the European market in that they will prevent diverted tonnage from exerting greater import pressure, EUROFER, the European Federation of Iron and Steel Industries, said in a statement.

"With these measures, the commission is strongly defending the interests of the European steel industry," said EUROFER, which represents more than 95 percent of EU crude steel production.

EU is setting customs duties for imported steel
[March 25, 2002]

The European Union has given more detailed information about the protection actions against possible effects caused by US-steel tariffs. The custom duties for imported steel to EU area can be as high as 26%. The lowest duty is said to be 14.9%. The EU Commission is set to decide about these custom duties on Wednesday March 27:th, 2002.

Steel tariffs effective - EU is preparing actions
[March 21, 2002]

On Wednesday, March 20, 2002 United States confirmed that the tariffs will be effective according to the original plan.

Now when the three year long time for steel tariffs in US is effective, The European Union is preparing actions. The European Commission will confirm these protective actions within few days but was not ready to go for details yet.

According to EU-sources the actions may be to set some restrictions for the imports to EU area. The value of these restrictions would be comparable to the amount of steel export of EU. In this way EU want's to make sure that the steel products that cannot now enter to USA markets, will not be dumped to EU area.

The initial plans are that these protective actions could last for some 6 months.

On Wednesday 20.3.2002 EU got the expected support from South-Korea and Japan, who are not satisfied about the steel import tariffs decided by President George W. Bush.

US and EU steel talks remain deadlocked
[March 20, 2002]

The US and European Union made no progress on Tuesday in talks in Geneva on Europe's demand for compensation for lost steel exports to the US. They follow President George W. Bush's decision two weeks ago to impose tariffs of up to 30 per cent on imported steel. Full article at Financial Times.

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