Brussels, 20/11/2001 (Agence Europe) - At a Brussels press conference on Monday, the US Under-Secretary of State, Grant Aldonas, mentioned some of the disagreements he aimed to discuss with governments from Member States and the European Commission: legislation on "Foregoing Sales Corporation" (FSC) and the dispute on steel.
Mr Aldonas explained that the USA would defend its position next Monday in Geneva before the WTO appeals panel and a decision on the matter was expected in December. Washington decided to appeal against the WTO's decision in October, a decision that interpreted the FSC as resembling illegal export subsidies. The US believes that the WTO panel had failed to inform the American Congress how it could amend this system and therefore conform with the WTO's rules (see EUROPE 22 August, page 3 - 12 October, page 10). According to the US, several different European systems, among them, French, Dutch and Belgian, could be guilty of the same imperfections. Without going as far as demanding that these systems be revised, Mr Aldonas explained that relations between the WTO and the different European systems of taxation should be more clearly defined. He added that as long as a tax system distinguished between taxable and non-taxable income overseas, problems would always be encountered in WTO rules. Mr Aldonas called for all WTO members and not just the Americans to find a way of ensuring that a set of rules was acceptable to all parties. Mr Aldonas said that if the EU imposed sanctions against the US (the EU has worked out that sanctions against the USA would be in the range of USD four billion) by increasing custom duties on certain American goods, the harmful consequences would push the prices of these products in Europe up and discourage European consumers from buying them.
In terms of the transatlantic controversy over GMOs, Grant Aldonas stressed the high level of frustration in Washington with what looked like an embargo and was therefore in violation of Article 11 of GATT. He went on to say that if anyone were again to mention launching a trade dispute settlement procedure at the WTO, that would meant that the time had come to recognised that there was a problem (that US products containing or made from genetically modified organisms had not been able to access EU markets for the past four years) and that the Europeans should be confronted with reality and told that they are violating WTO rules. Basically, a "regulatory system exists" for marketing such products and Washington would very much like it to be applied. In terms of the second aspect of this controversy, Mr Aldonas said that the EU programme for the traceability of GMOs had been well intentioned at the outset, but was not going in the right direction. He argued that such rules did not seem very practical, commercially speaking, since this would push a lot of US deliveries would be pushed out of the European market. We don't want to allow this type of demand or labelling requirements to form a disguised trade barrier, he hammered home, repeating the principle underlying the US approach, that measures in this area had to be based on something other than politics - on an assessment of significant risk, to ensure the rules and the additional burden they impose are justified, scientifically speaking.
Finally, on the veiled steel dispute, Mr Aldonas explained that the safeguard procedure targeting European and other exports to the US that potentially restricted their access to the US market was designed to both encourage internal restructuring (that had already been substantially undertaken, in his view) and to encourage the rest of the world to do likewise, which would help smash the vicious circle of public intervention that had been propping up a sector for years that was basically suffering from overproduction. He felt that the ideal way of dealing with this would be extra discipline regarding government action and slashing global steel capacity in the OECD. He felt that the problem of inefficiency could not be pinned on any particular country, but rather on a factory-by-factory basis, which raised the question of knowing how you can access the market and whether you are doing so with aid from the public purse. In the US, he went on, it genuinely is the market that stimulates restructuring, which was not the case in the rest of the world. He said that the US steelmakers had already consolidated and made substantial adjustments to the changing market circumstances (in the 1980s) although he felt that the Commission's view opposing his own was "totally false". The number of jobs that had been lost in the sector was proof of the pudding, he argued, as were the level of US productivity (perhaps the highest in the world) in terms of the number of hours worked per tonne of steel produced. He wondered whether the other countries really wanted make the same contribution to help solve the problem.