Bridges Weekly Trade News Digest • Volume 6 • Number 9 • 12th March 2002
DSB: US Steel-Tariff Plan Faces Fierce Criticism
Following the Bush administration’s decision last week to raise tariffs up to 30 percent over a range of steel products, a number of WTO Members have voiced serious concern over the US plan, arguing that it is a clear violation of WTO rules.
Interest groups among several countries, including Canada, Venezuela, the EC and Brazil are calling upon their governments to adjust their tariff structures to avoid further disruption of their markets as a consequence of the expected trade diversion. Friends of the Earth called on European governments to ban US imports of GM food and to levy an energy tax on US goods entering Europe in retaliation for President Bush’s imposition of a 8-30 percent levy on imported steel.
The EC, backed by Japan, New Zealand and Australia, has already launched dispute settlement procedures at the WTO, while other countries including Brazil, Taiwan, South Korea and China threatened to follow the same path. The EC announced it would seek compensation for approximately US$ 2.5 billion, the amount of steel trade it claims was affected by US measures.
EC Trade Commissioner Pascal Lamy commented that the "US decision to go down with protectionism is a major setback for the world trading system". Although WTO Director-General designate Supachai Panitchpakdi had been calling on Members to keep the issue of steel separated from the new negotiations undergoing in Geneva, the decision has sparked concern over the credibility of the US in the ongoing negotiations. "If a big power can blatantly go on taking measures which have been repeatedly found illegal in the WTO, what faith can you maintain in the system?" a developing country delegate said last week.
George Bush, Protectionist, THE ECONOMIST, 9 March 2002; Us Faces World Steel War Over Import Tariffs; WORLD TRADE NEWS, 6 March 2002; Europe Urged To Show Steel Resolve" FOE PRESS RELEASE, 6 March 2002; Us Under Heavy Fire At Wto Over Steel Tariffs, WORLD TRADE NEWS, 11 March 2002; Latin Steelmakers Say Us Tariffs Could Spark Others, DOW JONES NEWSWIRES, 7 March 2002.