Skip to comments.EU Steps Closer to U.S. Trade Sanctions
Posted on 07/21/2002 1:29:49 PM PDT by Tailgunner Joe
BRUSSELS, Belgium, July 18 (UPI) -- The European Commission Thursday appeared set to urge European Union governments to slap sanctions on the United States for failing to lift punitive import duties on European steel products.
President George W. Bush sparked protests from non-American steel producers this year when he decided to place tariff quotas and impose up to 30 percent extra duties on steel imports from March 20.
The EC, along with other steel-exporting states, is seeking to overturn the U.S. safeguard measure in the World Trade Organization. As settlements often take more than a year to reach, the commission had drawn up a list of American exports that will be subject to $379 of extra duties and tariff quotas beginning in August.
A further list of U.S. products worth $2.2 billion would be subject to additional duties if the WTO rules against the American action in fall 2003.
To stave off the threat of counter-sanctions, Washington has granted more than 150 exemptions to EU firms and American companies purchasing European steel products.
However, a commission report due to be discussed by EU foreign ministers Monday states the "product exclusions granted so far by the United States have been manifestly inadequate."
The study estimates $230 million of European steel products have been exempted from the duties, leaving more than $2 billion of exports subject to the tariffs imposed by Bush.
The report also finds Washington's measures, which were aimed at propping up the beleaguered U.S. steel industry, have been more damaging to American than European firms.
"One could say that the effects of the measures are almost the reverse of the stated objectives," the commission said, pointing to the artificial price increases U.S. firms have had to endure as a result of the measure.
EU trade spokesman Anthony Gooch played down the prospect of a prolonged trade disagreement between the world's two largest economic powers. "This is not a trade war, it's a trade dispute," he said.
However, Gooch hinted at the line the commission is likely to take when it makes its recommendation to EU governments Friday. "What the United States has done is manifestly illegal and many other WTO members think the same," he said.
EU foreign ministers are expected to make a final decision Monday on whether to sanction the United States