Brussels, 06/06/2001 (Agence Europe) - The Union was "very disappointed", on Wednesday, further to the American decision to begin an investigation that could result in setting up quantitative or tariff restrictions early next year against steel products imported from third countries.
"This is bad news", regretted European Commissioner Pascal Lamy. "We have often stated our determination to promote international dialogue on this issue, but the 201 road is not the right one. One cannot make the cost of restructuring the steel sector in the United States fall on the rest of the world", he said. In the context of the inquiry that has just been launched by the relevant Agency, the US International Trade Commission (USITC), the Community executive plans to firmly prevent the imposition of protectionist safeguard measures from constituting an appropriate response to the domestic problems of the American steel industry.
Community circles believe the rise in the historically low price of steel products and the rise in imports, together with the growing number of companies that resort to Chapter 11 of the law on bankruptcies (17 of them have gone bankrupt since 1998), added last year to the pressure already exerted by those in Congress supporting the deployment of public protection. The Federal Administration, which hesitated at length, has finally given way to them. On Tuesday, the US President insisted that the interest of the Nation is to ensure that, if there are unfair commercial practices within the steel industry, such practices are aggressively countered. George Bush also appealed - without giving names - to the producer countries of Europe, Asia and Latin America to engage in international negotiations with a view to reducing over-capacities and putting an end to government subsidies to their steel industries.
"Given American action, international cooperative action now seems likely", it is replied in Brussels, recalling that the EU recently proposed a high level meeting at the OECD "that could contribute to an international agreement on subsidy restrictions and the problem of over-capacity". The Union intends renewing the invitation made to the main producer countries to meet to examine possible actions and would like to clarify the debate with Washington, hoping to "reach a joint and correct analysis of the market and factors that underpin its development". As for the possibility of a reduction in access to the American market, "that seriously risks perturbing world steel trade and, other than its direct impact on European exporters, the safeguard measures would have as effect deviating substantial quantities of world production (up to 9 million tonnes) to the EU market", Commission sources complain. What's more, the same source points out that "these measures will in no way resolve the problems of the integrated steel industry" - in crisis as it has failed to adapt to market developments - and constitute an attempt at transferring the burden of the American restructuring to Europe", which could incite other countries where steel producers are having difficulties on the path of protectionism too and "counter the objective that the Union and United States share of having an open, liberal trading system".
EUROPE recalls that the procedure that has just been launched under Section 201 of the trade legislation in the United States, allows the Administration to take safeguard measures against products imported from abroad, imposing on them quantitative or tariff restrictions. This possibility will be offered the Bush team if the USITC concludes in some eight months that imports lie at the root of the serious injury invoked by the American steel industry. Washington will however have to ensure that it is in compliance with WTO rules. The European Union stands ready: "if the unilateral safeguard measures are introduced, we shall check their compatibility and, if that should not be the case, take appropriate action in Geneva", Commission sources stress.