Posted on 03/24/2002 2:27:14 PM PST by vannrox
BRUSSELS, March 22 The European Union (news - web sites) has drawn up a list of imports from the United States, worth about $2.1 billion annually, to penalize in retaliation for the Bush administration's recent imposition of tariffs of up to 30 percent on some imported steel. American steel, textiles and citrus fruit are among the items that would face punitive duties, officials said. The European Union has threatened sanctions if the United States does not agree to pay compensation for its measures to protect the struggling American steel industry. Under World Trade Organization (news - web sites) rules, the union is permitted to impose sanctions as harsh as a 100 percent import tariff almost immediately, if the United States "safeguard" measures for steel cannot be justified. ["We're disappointed because we're still in the consultative phase at the W.T.O.," the American official said. Any retaliation now, he said, was "definitely premature."] The European official who spoke about the way the union was proceeding said the list of products to be sanctioned was drafted with American domestic political impact in mind. Citrus fruit is on the list because of its importance in Florida, where the 2000 presidential vote was extremely close, the official said; steel made the list because of its importance in West Virginia and Pennsylvania, and textiles because of North and South Carolina, four important battleground states in midterm elections this year. The union is expected to set up quotas based on average annual imports over the last two or three years, and then impose "safeguard" tariffs on imports above the quotas. The tariffs will be lower than those of the United States, the official said, because the point is to maintain current trade patterns and keep them open, not to disrupt them, as the American measures will.
The union is confident that the Americans will not be able to justify them, an official said, speaking on condition that he not be identified. But the official said rapid action was looking less likely.
Instead, he said, the union will rely on the more thoroughgoing but slower dispute- resolution system at the trade organization. Under the procedure, the trade group conducts hearings in Geneva and then rules on what sanctions the union can impose. The process takes about 18 months.
"There is a lot of frustration in European public opinion," said Pascal Lamy, the union's trade commissioner. The feeling, he said, is that "if we wait for the judge for 15 months, we are crazy or naïve or weak." He continued: "But it's a political decision on our side. I want to stay within the international rules."
Under the trade group's dispute procedure, which began this week, the union has until May 20 to submit a list of products to be sanctioned. The draft list is now being circulated among the union's member states for comments before it is submitted to the trade group.
[In Washington, an American trade official said the Bush administration had hoped that the European Union would allow the dispute-resolution process to go forward before drawing up plans for retaliation. American officials have already begun discussions with the Europeans and with other countries, including China, over the steel tariffs and demands for compensation.
Separately, the union is putting final touches on protective measures for its own steel industry, which it will activate as soon as next week if it sees a risk of a surge in cheap steel diverted from the United States reaching its shores.
The steel tariffs and threats of retaliation come as another trans-Atlantic trade dispute is also at a critical stage. The union has applied to the World Trade Organization for authority to impose $4 billion in trade sanctions on the United States to compensate for the unfair tax breaks the United States gives its exporters. Washington has said that the harm done to the union by the tax breaks is closer to $1 billion. The panel hearing the dispute is scheduled to reach a decision next month.
It would appear so, or they wouldn't react with such bluster. No rocket science here, IMHO.
at least as many as necessary to end the ones clinton started.
I don't know whether we have equity in subsidies, but I agree with you - let's eliminate them all and let the free market REALLY work.
What George W. is saying seems straightforward to me. We aren't going to subsidize everyone who trades with us. It's a new time and the rules are being changed. I don't believe tariffs are what's on our President's mind. In my opinion he's interested in getting rid of all the inappropriate arrangements we've allowed that really put the U.S. at a disadvantage in world trade.
Sometimes it's necessary to take action, get the other sides' full and undivided attention. I do believe George W. has done just exactly that, Texas-style.
1. European governments have been reducing subsidies to their steel industries. As a result, their steel companies have had to cut jobs and reorganize.
2. Imports to the US have dropped to below 1997 levels. WTO rules on "safeguard measures" require that the country implementing those measures in response to an increase in imports (whether or not the US should be in the WTO is another question). And, according to the US Geological Survey, the ITC ruled that 1998 imports, which were the highest, did not do significant damage tot he US steel industry.
3. Canada and Mexico account for approximately a 1/3 of US imports, but these two nations have been exempted, which is also a violation of WTO rules, if I understand correctly. Canada, as a single country, is our single largest importer of steel.
4. The US integrated mills, for whom these tariffs have been enacted, face their stiffest competition from domestic mini-mills, not foreign imports, which only account for appreoximately a 1/4 of US steel consumption. Overall production costs of the mini-mills is cheaper - the electric melting process to the scrap steel used. Mini-mills, according one report I saw, now have a 50 percent market share.
It is pure protectionism.
Of course, we already knew that.
The US Geological Survey on Iron and Steel proved to be particularly useful, as well as reports from the Financial Times.
I assume this is the relevant part of your comments. Perhaps it's true. I ain't no economist.
I still wonder why the EU is howling so much about what George W. is doing. Doesn't make sense unless the EU steel producers lose some advantage they are trying to protect.
This is not just a trade war, it is a way the Euretards are trying to control our elections.
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