Brussels, 25/03/2002 (Agence Europe) - For the first time in ten years, the EU is about to deploy a safeguard measure to discourage steel exporters ejected from the United States from selling their products on the Community market. On Monday, EU sources said that this would not last a day longer than the US measures, adding that the Community would protect its markets without being protectionist. Customs duties ranging from 14.6% to 26% will be imposed, probably from 3 April 2002 onwards, on imports of 15 categories of steel (rather tahn country-by-country) over and above normal imports which have been set at slightly over 11 million tonnes a year. The trigger threshold is set at 5.7 million tonnes for the six month period in which the provisional regulation the Commission is expected to adopt on Wednesday (using the written procedure) will apply. The EU now has in its hands an indicative list of US exports likely to be hit, failing satisfactory agreement with Washington on compensation. Consultations on this issue, and the meeting of the Panel looking at the legality of the US restrictions, will begin in Geneva on 11 April.
Brussels sources stress that what they are trying to avoid is providing an outlet for all the steel that the US is rejecting, stressing that the US was well aware that by restricting its imports it would be triggering a domino effect. Like the US safeguard measures which effectively bar most EU steel exports from the US market, the safeguard measures the EU is preparing are based on the 1994 multilateral agreement setting out the criteria for trade safeguard measures. The same Brussels sources point out that the EU measures are defensive, while the US measures are not in response to any rise in imports. The EU measures are non-discriminatory (applying product by product and not country by country to avoid penalising specific countries, with an exemption for developing countries making up at least 3% of EU imports of the product in question); meet the requirements laid down in the Safeguard Agreement (the EU steel industry already operates in severe conditions and are confronted with a very high risk of the diversion of trade usually destined for the US market); and will not lead to reduced access to the normal market. "These measures fully comply with the rules. They are justified and equitable for both the industry and third countries"; the same source says. The trigger threshold is fixed at a "reasonable level", it is insisted, while quotas have been calculated on the basis of average imports between 1999 and 2001, increased by 10%. The European safeguards would thus only affect 40% (in volume) of all Union steel imports which are, on average, 27.5 million tonnes (26.5 million tonnes in 2001). Out of the 21 categories for which the industry states there has been serious injury, 15 categories - all covered by American measures - have been retained by the Commission, namely. They are non alloy hot rolled coils (with the quotas being established at 1.91 million tonnes with an additional duty rate of 18.4%); non alloy hot rolled sheets and plates (281.912 tonnes, at 26%); as well as non alloy hot rolled narrow strip (99.031 tonnes, at 26%); alloy hot rolled flat products (23.778 t; 26%); cold rolled sheets (935.630 t., 16.3%); electrical sheets (other than GOES) (41.444 t., 15%); tin mill products (308.697 t., 17.1%); quarto plates (700.446 t., 26%); wide flats (74.016 t., 24.8%); non-alloy merchant bars and light sections (415.723 t., 19.4%); alloy merchant bars and light sections (99.823 t., 26%); rebars (737.083 t., 14.9%); stainless steel wire (18.547 t., 15%); fittings (6.076 t., 15%) and flanges other than stainless steel (46.253 t. 26%). For these steel categories, the Commission considers it provisionally has clear proof that a recent rise in imports (between 1998 and 2001) at low prices threatens to cause serious injury to Community producers, injury that would be difficult to repair, it was stated in the draft regulation. The American restrictions could deflect some 15 million tonnes towards the European market, that is, $4 billion annually according to forecasts. If the United States does not dismantle such measures, the Union will immediately follow suit. Where necessary, the European provision will remain in force for 200 days. It would then be renewed and possibly amended, through adoption of a "definitive" Council regulation enacting by qualified majority. As soon as it takes effect, the Commission will open investigation proceedings that should allow the impact of American restrictions on the European steel industry to be measured more accurately.
While protectionist measures will not directly affect the United States (its name does not appear on the long hit-list), the retaliatory measures that the Union is envisaging if it does not receive compensation to which it believes it is entitled, would aim at certain symbolic "Made in America" exports such as agricultural products, textiles (off-the-peg, glasses, etc.) and steel (iron or steel products such as tools, doors, windows and frames, toasters, containers, cables, etc.). According to the first list, which must be notified to Geneva before 19 May, products also include weapons (revolvers, pistols, hunting rifles and sporting guns, munitions), motorbikes (including Harley Davidson), vehicles (special, lorries), fruit juice, rice, dried vegetables, fresh fruit and dried fruit, paper and cardboard (bags, boxes, etc.), watches and some furniture.