Brussels, 10/12/2001 (Agence Europe) - The European Union is threatening to complain to Geneva if President George W. Bush decides to implement the safeguard measures that the United States International Trade Commission (ITC) recommended to him in order to protect an American industry loosing momentum in the face of competition from foreign steel producers. It calls on the American Administration to reject this call for the protection of an industry already hiding behind numerous defensive measures and would come down to virtually closing the American steel market to imports from the rest of the world, indicated the European Commission in a press release issued on Monday.
"One day after the US House of Representatives has just voted to open markets and update the WTO rule-book, the ITC is recommending that the exact opposite be done in steel", commented Commissioner Pascal Lamy, concerned with the "negative signal" that it thus sent to the rest of the world. According to him, American industry needs to "put its own house in order", without doing so at the expense of others, that have already undertaken painful restructuring, which it still needs to do. The American steel industry is already "protected" by 123 anti-dumping measures and 31 compensatory measures including 30 and 16, respectively, which restrain or block European exports, they underline in Brussels, where the conclusions put forward by the ITC are all the more surprising given that American steel imports have, this year, seen a 25% fall compared to the previous year.
The decision to increase customs duties from 20% to 40% on foreign steel is now in the hands of President Bush, who has 60 days (as of 19 December) and, according to the Europeans, a wide margin for manoeuvre to decide. And this while calling and hoping that the Administration opts for measures that favour the adjustment and restructuring of the market rather than its closure, the Union threatens: If this approach (favoured by the ITC) is accepted and implemented, it would constitute a violation of WTO rules and immediately lead to the filing of a complaint in Geneva, which the Europeans are confident to see lead to a rapid condemnation of American measures. As, they recall, this would not be the first time that the United States is condemned by Geneva for the failure to conform of their safeguard, anti-dumping or anti-subsidy procedures in the eyes of international law. Moreover, by transferring the burden of American restructuring onto other countries, the United States is pushing its competitors to also turn towards protectionist measures, against the collective aim of opening the trade system, underlines Brussels. Also warning of the danger of reducing to nothing the efforts deployed, notably by the United States, within the OECD to bring a fundamental solution, a global solution, to the sector's problems, which notably suffers under the weight of its over capacity and excessive competition. The exercise can only be a success if the United States is prepared to substantially contribute towards the reduction of unprofitable capacity and clearly signal to third countries that, ignoring the ITC recommendations, their market will remain open to fairly imported steel.