European and Asian countries joined together on Tuesday to demand that the United States drop its duties on imported steel or face the possibility of billions of dollars in retaliatory measures against products ranging from oranges to Harley-Davidson motorcycles.
The united call for change in US trade policy followed Monday’s ruling by the World Trade Organisation’s (WTO) appeals panel that the duties — introduced by the US in March 2002 — are illegal. It was one of the most politically charged cases to date brought before the Geneva-based body.
”I regret that the US resorts to protectionism to deal with the restructuring problems of its steel industry,” said Sweden’s Industry and Trade Minister, Leif Pagrotsky.
The appeals body is the WTO’s highest tribunal, and the decision is final. The US criticised the ruling and insisted it was right to impose the ”safeguard” tariffs for three years to give its domestic steel industry time to restructure. It made no
immediate announcement about its next step.
The ruling ”shows that multilateral rules for international trade work as intended, and that small countries like Norway can win”, said Norwegian Foreign Minister Jan Petersen. The case was brought by the European Union and seven other countries, including Norway.
The 15-nation EU threatened to slap sanctions of up to $2,2-billion on US imports such as citrus, textile products and Harley-Davidson motorcycles manufactured in the US. EU officials said they will act if the US steel duties are still in place five days after the report has been formally adopted by the WTO, which will likely happen on December 1.
For Norway, Petersen mentioned steel, clothing, wine, tobacco, apples, sporting goods and hunting weapons as possible targets for retaliation.
For three of the countries that brought the complaint — China, Norway and Switzerland — it was the first time that they had taken a case to the WTO under its dispute settlement procedure.
Switzerland joined the other complainants in a joint statement that said the US had ”no other choice” but to remove the import duties without delay.
In Asia, complainants Japan and China said they were ready to consider sanctions.
”Should the US refuse to terminate its illegal practice, we will notify the WTO of our retaliatory measures based on the overall losses,” Japan’s Economy, Trade and Industry Minister Shoichi Nakagawa said in a statement. ”We do hope the
US will accept the ruling and terminate the measures immediately.”
Nakagawa did not specify the size of Japan’s retaliatory sanctions, but the Mainichi newspaper said they could reach 10 billion yen ($91,7-million).
”With respect to the further measures taken by various parties, it will depend on the attitude that the US will take,” Chinese Ministry of Foreign Affairs spokesperson Liu Jianchao told a regular news briefing.
A South Korean official said it was too early to say what the country would do but that Seoul is studying the options, and New Zealand Trade Minister Jim Sutton said his government encouraged the US to remove the duties.
In Brazil — the final complainant — there was caution.
”This is not the time for Brazil to retaliate, even though it has the right to. It’s time to establish a climate for negotiation,” said Jose Augusto de Castro, director of the Brazilian Exporters Association.
In the US, despite government insistence that its actions were legal and justified to protect the US steel industry, the WTO ruling was welcomed by businesses that use steel to make their products.
”For the sake of the US manufacturing sector, it’s time to end the tariffs now,” said William E Gaskin, chairperson of the steel task force of the Consuming Industries Trade Action Coalition.
But steel manufacturers urged Bush to stand firm.
”Our government and the American steel industry have diligently complied with the WTO safeguard procedures. A long process of public fact finding by our trade commission has documented irrefutable evidence of unfair trade by foreign steel producers,” said Leo W Gerard, president of the United Steelworkers of America.
”Now it’s come down to whether or not the president will stand by his decision to combat unfair trade by enforcing America’s trade laws.” — Sapa-AP