Brussels, 22/03/2002 (Agence Europe) - On Friday the European Commission gave Member States a hit list of US products likely to be hit by EU sanctions - up to a total of EUR 2.5 billion worth - as part of the legal and trade steel dispute with Washington. The same day, the EU was due to unveil details of the defense mechanism it will be immediately deploying along its borders to head off a likely wave of steel imports unable to enter the US market since Wednesday. At the end of the afternoon, however, the experts were still discussing a number of controversial measures of the provisional regulation the Commission will be adopting using the written procedure.
A Commission spokesperson explained that the Commission had provided Member States with a list which it felt was appropriate for submission to the World Trade Organisation (WTO) with a view to safeguarding the EU's right in the future to impose counter-measures on US steel if the EU's attempt to win compensation fails. Other diplomatic and EU sources, however, suggested the document was still on the drawing board. The indicative list must be sent to Geneva before 19 May 2002. It will include all steel and textile products and US citrus fruit, signal the same Brussels sources. In an exclusive interview with the Wall Street Journal, Commissioner Pascal Lamy said the hit list would include products such as fruit juice, Harley Davidson motor bikes, manufactured in politically strategic States for George Bush and the Republicans, notably Florida, Wisconsin, Pennsylvania and West Virginia (thanks to which he just won the election in November 2000). Even if firearms are targeted, declares the paper in a vexed tone, the Union would avoid attacking imports because they are necessary for competitiveness, such as software and aeronautics. Mr Lamy preferred not to confirm or discount "speculation" about the political nature of the document and its targets. A spokesperson stated that, "Consultations are ongoing and what I can tell you is that Mr Lamy didn't mention the list during or after the interview", he added. This explains the logic in which this hypothetical retaliatory mechanism had been formulated and whose objective was to "encourage or push the two parties to agree on the rules of the game. He also pointed out that there were divergences on bananas and hormones, where the USA had not hesitated to use sanctions, which hit France hard, particularly its wine and cheese, exactly "where their impact would be felt most". Countermeasures are aimed at encouraging a change of mind. Mr Lamy said in a rare interview given in the New York daily, that action should be taken in areas where it was possible to build coalitions. Speculation or bluff? No clarification was available Friday evening, not even on whether the list had been finalised or the fact that it was already in the hands of Member States
For the rest: an indicative list will reach Geneva within the time set, whether or not the Union is resolved to sanction American restrictions, to be done immediately, probably by asking for the WTO's extra "benediction" (an authorisation that, in principle, it does not have to request if it places this action within the strict framework of the multilateral agreement on safeguards) or only once the trade arbiter has enacted - no doubt not before June 2003 - on the lawfulness of the American provision. At the end of the day, the political decision will be in Commissioner Lamy's hands, in consultation with the Member States, the spokesman pointed out. The best way to avoid reaching this point (except for lifting US restrictions) is to compensate the Union for trade losses brought on by this provision, he added. Regarding the defensive provision, which was discussed within the Committee 133 on Friday, the final updating before publication of the provisional regulation came up against certain controversial provisions and points of law. EUROPE has reason to believe that the Commission was able to obtain clear proof of a sudden, acute and significant rise in low price imports for 15 steel products in at least three Member States. Considering that the industry is in a critical situation, it considers it necessary to set the temporary provision in place immediately in the form of tariff measures for each of the 15 products and, in order to safeguard flows of imports at their highest recent level, to establish tariff quotas (over and above which the imports would be surtaxed at 25%) on the basis of the average annual import levels in the years 1999, 2000 and 2001, plus a 10% margin allowing account to be taken of the eventual developments over longer periods.