Brussels, 25/10/2001 (Agence Europe) - The Union is not alone in protesting against the threatening tone the American safeguard procedure against the imports of certain steel products has taken. South Korea, also faced with a possible block to its steel deliveries to the United States, warned: "We shall undertake joint actions with other major steel exporters", declared the minister for Industry Chang Che Shik, on Wednesday. Among the main suppliers of the American market, there are also China, Japan, Russia and Brazil.
The first phase of the procedure initiated in June under section 201 of the American trade legislation has led the International Trade Commission (ITC) to conclude that American steel companies are suffering "serious" injury in a dozen sectors amounting to 79% of their production. This official body has to submit "remedies" to the President by 19 December to take the pressure off the American industry (customs duties, quotas, tariff quotas). George Bush will then have two months in which to either endorse or reject these recommendations.
The European Commission's reaction to the initial ITC conclusions was immediate: "We do not agree (….). If the United States decides to close its market, there is no doubt that we shall take the case to the WTO". This action potentially aims at 2.8 to 3.36 billion euro, or 60% of all European steel exports to the United States, sources in Brussels estimate. The Commission has already spoken of its "serious" concerns to the ITC, as to the "way this enquiry was initiated and is currently being conducted", asking for "account to be taken of the enormous volumes involved", to "take the greatest care to respect all the conditions and demands provided for by the WTO rules and case law" regarding safeguards. Yet, it observed on 10 September in the context of the enquiry that: - the narrow definition of the products in question is disputable, likewise the lack of the notion of "unforeseeable developments" cited in Article XIX of GATT as potential reason for limiting access to markets on an exceptional and temporary basis. Whatever, sources in Brussels consider, the existence of such developments "is hard to demonstrate here" given the "structural weakness that the American steel industry has experienced for a long time", and it would be just as "difficult to argue that the cyclical downturn in demand was not reasonably predictable"; - it is surprising that restrictions may be envisaged whereas "recent imports of most products in question have substantially diminished", which means rather that the upward tendency "is already over and that the imposition of measures is no longer warranted"; - the evaluation of the gravity of the injury and the causal link to imports is simplistic in the extreme; - the import restriction would amount to procuring a "double restriction" on many of the said products that are already the subject of anti-dumping or anti-subsidy measures.