U.S. 'Disagrees' With WTO Steel Ruling

By Agence France-Presse The United States "disagrees" with Nov. 10's World Trade Organization ruling that Washington's steel tariffs violate global trading rules and will review the decision "carefully," officials said. The U.S. Trade Representative's (USTR) office gave no indication of exactly how Washington would respond to the latest blow from the WTO. But the USTR noted in a statement that the tariffs, known as the "temporary steel safeguard measures" imposed by President George W. Bush, "were intended to provide the domestic industry with the breathing space needed to restructure and consolidate." The statement said the WTO appellate panel rejected some of the arguments raised by U.S. trade partners objecting to the tariffs but that the conclusion was unfavorable to Washington. "While we are pleased to see [that] the Appellate Body upheld the panel's rejection of some of the arguments raised by the complainants, we disagree with the overall Appellate Body findings," the statement said. "We will be reviewing the WTO report carefully." But the ruling clearly marked a setback for Washington, which could face new sanctions on the United States in addition to the billions of dollars of punitive tariffs expected from the EU in another dispute over export tax breaks for U.S.-based multinationals. The European Union has threatened to impose $2 billion in retaliatory sanctions if the steel tariffs are not lifted, and Japan is considering sanctions as well. The steel tariffs have been controversial at home as well as abroad, with some industries arguing the measures have boosted prices of materials for manufacturing of automobiles and other goods. One trade group opposing the tariffs, the Consuming Industries Trade Action Coalition Steel Task Force (CITAC), urged the U.S. administration to terminate the steel tariffs immediately. "In addition to the continuing damage and job losses that the tariffs are causing U.S. steel consumers, the U.S. now faces billions of dollars in retaliatory tariffs by our trading partners," CITAC chairman William Gaskin said. "For the sake of the U.S. manufacturing sector, it's time to end the tariffs now." But Nancy Gravatt, spokeswoman for the steel industry trade association, the American Iron and Steel Institute, called on the White House to keep the tariffs for the full three years as intended to allow the industry to recover from one of its deepest slumps. "We would be urging President Bush not to buckle under pressure from the EU," Gravatt said. "We feel if the rug is pulled out halfway through the program, there will be major repercussions. The consolidation of the industry is only halfway through and workers in many industries are looking at this as a test case." Bush imposed the tariffs in March 2002 under section 201 of U.S. trade law, which do not require "dumping" at unfair prices or with unfair subsidies but evidence that an industry is hurt by foreign competition. He argued that temporary tariffs of up to 30% on most foreign steel were necessary to protect ailing U.S. steel mills and their workers. The European Union initiated the move against Washington's safeguard measures and was joined by Brazil, China, Japan, New Zealand, Norway, South Korea and Switzerland in a complaint lodged at the Geneva-based WTO last year. Copyright Agence France-Presse, 2003