Toledo, 18/03/2002 (Agence Europe) - While the deployment of European defensive strategy has been progressing in Brussels and in Geneva, the EU Trade Ministers have taken stock with Commissioner Pascal Lamy of the thorny steel issue with the United States, on the occasion of an informal seminar held on Monday in Toledo under the chairmanship of Spanish Economy Minister Rodrigo de Rato. The day after this session - essentially devoted to current transatlantic topics and to the strengthening of relations with Latin America - the second Conference of Trade Ministers for the Euro-Mediterranean zone opened on Tuesday morning. Participants include Israeli and Palestinian officials.
The intra-Community consultation, launched after the announcement of trade restrictions that will strengthen the American steel industry from Wednesday on, are now close to unravelling. The safeguard mechanism, intended to discourage exporters cast off by the United States from dumping their unsold products on the European market, will be disclosed in the days following this ministerial session, and the final touches will be made by the safeguards committee on Tuesday. The same day, consultation with Washington on a hypothetical friendly settlement before arbitration procedure is launched will open in Geneva, with a first bilateral meeting under the auspices of the WTO. Two days before this meeting, the European ambassador, Carlo Trojan, responded in writing to the arguments put forward by his American counterpart, Linney Deily, who sought to legitimise Washington's approach and discredit that of Brussels. His letter is eloquent regarding the extent of the transatlantic gap in the interpretation of the facts and international law, mainly the 1994 agreement on safeguards, the provisions of which are sufficiently vague to explain the huge number of "defensive" measures and disputes that it has generated. "The Union will fully use the resources provided by the WTO system in order to minimise the damage done and to obtain reparation", he said in a thinly veiled threat that trade sanctions would be used if no immediate compensation is obtained from Washington. "We are confident" that we shall win the arbitration procedure (Ed.: the effect of which would also be to eliminate the legal grey areas, something that the United States and its WTO partners seem to be keen on), if only because the "misuse of safeguard measures is systematic", not only in terms of procedure but also in terms of substance, he said. After having argued that such measures have no economic founding (the absence of any internal restructuring proposal or requirement shows that the United States prefers to put its problems onto the foreigners rather than assume the responsibility of having to confront painful national choices). Mr Trojan criticises the rhetorical or legal arguments put forward by Washington, mainly the surtaxes that are not confined to a handful of steel products but aim at 14 of the 16 categories covered by the recommendations of the American international trade commission, as well as the exemptions granted to NAFTA partners, Mexico and Canada, which make the measure discriminatory, according to the European approach. He well noted the remarks made by the Administration which boasted before the national press that it had given the steel industry a "higher degree of relief" than that recommended by most federal commissioners. In short, this measure is not a defensive but a proactive safeguard, which must therefore be considered and countered as a unilateral protectionist act. Hence the European request for immediate compensation. Mr Trajan concluded ironically by saying that the fact that Washington is at odds with international law inflicts serious additional injury on the world steel market and doubtless also on the competitiveness of American user enterprises, to such an extent that Alan Greenspan, president of the Federal Reserve personally expressed his disapproval.