Brussels, 18/12/2001 (Agence Europe) - The joint press conference held by Commissioner Pascal Lamy on Tuesday with his "counterpart and friend Bob Zoellick", in Brussels for the first time in his capacity as US Trade Representative, opened with an exchange of praises supported by a very successful balance sheet being drawn up of the recent progress made in transatlantic cooperation on the trade front. The same day, a bilateral arrangement with a view to final settlement of the disputes on copyright - in the context of which the US legislation authorising free diffusion of music on commercial sites had been condemned in Geneva - confirmed the satisfaction felt by the two officials. The initial conviviality, however, finally turned to verbal sparring when the steel affair was tackled.
The Union is willing to make a further effort to reduce its capacities, by way of 16 million tonnes of finished products including 13 in raw steel over a four year period (Ed.: out of an annual capacity of 200 million tonnes), said Mr Lamy. The offer, however, which was made the same day in Paris where the high level OECD meeting on steel was being held, is "of course very closely linked to the process as a whole and above all to the way in which the United States behaves (…). We shall not do it for nothing", he said. The condition set is that Washington should renounce the temptation of protectionism and unilateralism, to proceed to the necessary restructuring of its industry that is continually postponed". "Any single party cannot be held responsible for the current situation", he said, convinced of the structural nature of the problem for which the United States blames imports although they continue to decline on the US market. A sustainable and effective solution to the sectoral crisis would be found in over-the-Atlantic restructuring, by the accessibility of this market to European products (including the renouncing of the "very high level of protection") and by global reduction of capacities, he insisted, agreeing that at least on one point Brussels and Washington share the same analysis: - the problem is a global matter because of the over-capacities and the over-fragmentation of the market, in the face of ever falling demand. Nonetheless, where Americans place emphasis on the rebalancing auto-generated by the market - while urging reticent rivals such as Russia, Korea, China or Japan to restructure - the Europeans give preference to both individual and collective efforts in the context of a truly cooperative and responsible approach. Also, it is considered in Brussels, the European industry has already made considerable sacrifices in the space of fifteen years (including the reduction of over 50% of its work force), an example that proves what one can do at home to remain or to become competitive, thus contributing to helping the global market. "We shall follow this closely over coming weeks", said Mr Lamy, who added: "Time is running out".
"It is clearly a global problem", said the US Trade Representative, and US industry cannot take advantage of the grants and protection the EU provides in its pure "Socialist tradition". He pointed out that the protection measures that the US was considering taking would be temporary, simply lasting long enough for the industry to "adjust" and return to competitiveness, adding that it would not make any sense otherwise, rejecting the idea that the industry needed restructuring. He felt that the US industry had already been restructured, the proof of this being the fact it had sacrificed more than 60% of its workforce over the last few years. Mr Zoellick said that imports accounted for 40% of the US steel market in 1998 and that imports "still" made up 30% of the market in 2000, 20% of which from Europe, which was a "net exporter". Mr Lamy said that the situation had changed this year and that was no longer true, responding to his counterpart's references to the weakness of the euro and its impact on European business ("the competitiveness of US steel is connected with the currency, but 10 or 15 years down the line?"). As for the legality of the planned measures, he warned that the conditions laid down by the WTO still had to be met.
The same day, a first step was taken in the direction of a global solution when most of the 39 countries taking part in the OECD meeting in Paris agreed to cut their production capacity to the tune of 80 to 84 million metric tonnes a year (as opposed to the EU's 100 million tonnes target). The Ukraine and two other countries did not follow the rest of the pack, but it is more the US's intentions that the EU is sceptical about. The Director General for Trade at the European Commission, Peter Mogens Carl, said that they were optimistic about the will and capacity of the meeting's participants to commit themselves to global reductions but were still uncertain about the US following the recommendation that President Bush tax imports hard. If the safeguard measure is actually decided upon in March 2002, EU exports will fall and the Union will have to ask Geneva for authorization to take similar compensatory measures, the net effect of which would be to lead to increased unemployment throughout the world. He said that the people with their hands on the trigger carry an enormous responsibility in trying to export their problems, but hoped all the same that a long-term policy and a final agreement would be reached next year, if possible before the month of April, in line with the promises that had been made. In theory, he said, we should all pledge to identify the greatest number of unprofitable sites to be closed down.