Brussels, 08/03/2002 (Agence Europe) - A row is breaking out all over the world following the US decision, from Brazil to Australia and right through Europe. It has pushed the Director of the World Trade Organisation (WTO), Mike Moore, to speak out and call for the US and those protesting to do all they can to come to an agreement before going to arbitration and a subsequent battle of safeguards against safeguards. A spokes person indicated on Friday that the WTO had just received two complaints from the European Commission, which is opening a sixty day consultation period in an effort to come to an amicable resolution to the conflict and to negotiate compensation for the Union from the USA, which could involve trade sanctions against those "giving us a hard time".
In a rather taciturn statement made on Thursday, Mike Moore, WTO Director General declared that, "It is always preferable that conflicts are resolved between members themselves". The following day, the institution's dispute settlement body endorsed the arbitration verdict, enjoining the United States to dismantle its safeguard measures against the import of still conduit tubing from South Korea, a ruling that the Union and Australia consider as an ominous precedent for the new American decision. By the safeguard clause it has just invoked to protect its steel industry, the United States "has only repeated violations of its obligations towards the WTO which are of the same order as those condemned in this report and in earlier reports" of the appellate body, stressed Carlos Trojan, EU Ambassador to the WTO, whereas his Australian counterpart said: "Despite these clear and unequivocal verdicts (issued in the pas: Ed.), we have seen nothing to demonstrate that the United States has done anything to correct the inconsistencies in the application of its safeguard legislation". As the same time as the requests for consultation lodged by the Union, required precondition for launching the arbitration procedure, similar approaches have been made by Australia, Japan and New Zealand. Others were expected from Brazil, Taiwan and possibly China. South Korea, the world's sixth largest steel producer, for its part, has decided to suspend the action that it had announced, the time it takes to consult the Union and Japan on how to follow up the American decision and see how the European approach develops.
In Brussels, consultations took place, on Friday, in the 133 Committee that brings together representatives from the Member states and the Commission, to set up a strategy the major outlines were unveiled by Pascal Lamy (see EUROPE of 6 March). The meeting of the safeguard committee, on 12 March, will be the "next important stage" for the deployment of the defensive device (quotas and/or additional duties) and it will be a question of stating "how and when we shall begin" this action in case of a substantial and unpredictable increase in imports compared to their normal level", said the Commission's spokesman. "We must stand ready to react when it occurs" basing ourselves on "fundamental proof" gathered in the meantime, he said, adding that the surveillance mechanism on flows in imports was activated on 1 January as a "preventative measure in case the worst happened, and the worst has happened". He then recalled that the Union had the perfect right to have recourse to a "non-discriminatory" defensive safeguard, against the "proactive" measures that Washington will introduce on 20 March, which "are not non-discriminatory", as certain countries are exempt, that they "target some more than others and are not justified by an increase in imports, given that the tendency on the other side of the Atlantic has been a reduction for four years.
"We d not want to see the quantities of steel that the United States has rejected land on our shores (…) It would be neither reasonable nor right to sacrifice our industry", source in Brussels tell us. The Commission considers that the risk of a flow of steel products that usually find their outlets in America landing in the Union are "enormous", as the "two main markets for steel are the United States and Europe". It also states that candidate countries have not to fear a downward pressure on their usual deliveries on the European market, through anti-dumping measures or other trade defence instruments. "We shall maintain this level whatever happens and fully respect our obligations".
And whereas Canada and India were applauding the exemption secured and that the rest of the world was protesting or were worried, the announced closure of the American market was viewed unanimously within the Union. This decision is "serious and unacceptable" for President Chirac, "unacceptable and contrary to free trade", according to Chancellor Schroeder, and it is "an unacceptable mistake" for Tony Blair. Agreeing with the Commission's analysis, Unice "regrets that President Bush should have given in to the pressure of internal protectionists for internal political reasons without paying much attention to the implications of his decision on relations with his partners", "with the risks of a trade war in which companies will carry the can". The American device has "strong destabilised the markets with immediate negative consequences for the companies of the countries affected", the European employers add. The representative for the sector, the Eurofer Confederation also riles against this "unfair, misplaced and probably counterproductive decision", in the sense that it "endangers the resumption of economic growth in the United States" and "seriously harms industries consumers of steel". It also regrets that "the American Government should not have paid all the attention they deserved to the EU proposals to try to find an amicable solution". In the OECD, there is concern that the decision may reduce to nought the good will of producer countries that have already recognised "the need to refrain from recourse to anti-competitive subsidies, aid in favour of inefficient plants and protectionist or safeguard measures". "It is necessary to pursue initiatives taken to break the cycle of trade friction and tensions linked to adjustments. I urge the authorities of participating countries to pursue with determination this process engaged under the auspices of the OECD and to take full part in the meetings that the OECD will have on 13-15 March and 18-19 April" declared the Organisation's Secretary General. Despite everything, in Washington, Trade Secretary Don Evans is "confident that by continuing to work with our friends and allies throughout the world, we shall be able to settle this problem".