EU formally lodges complaint over U.S. steel tariffs

Associated Press

GENEVA – The European Union has formally started discussions in the World Trade Organization over the United States’ decision to impose punitive tariffs on imported steel.

“I can confirm that today the EU formally requested consultations with the United States over its decision to impose safeguards,” EU spokesman Anthony Gooch said Thursday.

The WTO said it had received the request.

Under WTO rules, a member country that believes another member is breaking international trade rules must first ask for consultations over a period of 60 days. If the two sides fail to settle the issue amicably, the complaining country can then ask the WTO to appoint a panel of trade law experts to make a legally binding ruling.

President Bush announced tariffs Tuesday of up to 30 percent for three years on a wide range of steel products. Under WTO rules, a country can increase tariffs temporarily to protect a domestic industry that is restructuring, but the EU says the U.S. action does not conform to the WTO restrictions.

It argues that the problems facing the U.S. steel industry come not from imports, which have been decreasing, but from its failure to make itself competitive during the 1990s.

Last year, the EU exported more than 6 million tons of steel products worth dlrs 4.5 billion into the United States, or 28 percent of total EU steel exports.

The WTO procedure likely will take years to complete. In the meantime, EU Trade Commissioner Pascal Lamy said the EU was opening procedures to draft safeguards to keep cheap steel from other parts of the world from being diverted into Europe.

“We have to exercise our right to protect our industry and our jobs,” he said.

He said the EU also would also consider seeking compensation from the United States via retaliatory tariffs.

Also Thursday, three French government ministers issued a joint statement expressing France’s “regret that the restructuring of part of the United States’ industry … has been brushed aside to favor protectionist measures.”

South Korea has also said it will complain to the WTO.