Brussels, 14/03/2002 (Agence Europe) - With preliminary procedures necessary before the formal opening of arbitration, consultations between the Union and the USA will begin on Tuesday 19 March in Geneva, in an effort to diffuse the steel conflict. A European Commission spokesman explained, "This is the first step in the procedural stage" to solve the differences, with which other steel supplying countries, heavily penalised by US safeguard measures, could be part. The consultation period for finding an amicable solution could stretch out over two months as from 7 March. The second Union petition aims to hold consultation on trade compensation, to which it believes it has the right to claim from the USA. The latter of course, believes the contrary and whose response is still awaited in Brussels. This procrastination, while time is running out, can undoubtedly be explained by the painful dilemma that the petition could impose on the US government: accepting negotiations for compensation before an arbitration panel has judged whether US measures are legal, would be tantamount to recognising its faults and to refuse negotiations would certainly trigger off European retaliation against US trade. These consultations must in principle come to an end at around 7 April. From this date, the EU will have 30 more days to say whether it is going to retaliate against US imports. If the EU does this, the USA believes that it would be contravening WTO rules, as it would have misinterpreted the provisions of the agreement on safeguards and should abide by normal procedures. It remains to be seen if the provisions are sufficiently flexible for them to be interpreted in a way that both parties are right. It begs the question why none of the forty countries already threatened by the US restrictions did not try before and at Doha, to obtain more than 144 and attempt to dissipate these shadows from the new trade round, as had been the case in the provisions on anti-dumping and compensation measures.