Brussels/Washington, 23/10/2003 (Agence Europe) - If American surtaxes on steel imports are ruled illegal in appeal by the World Trade Organisation, as they doubtless will be on 9 or 10 November, the United States will be powerless to stop the Union from sanctioning "Made in America", from fruits down to textiles. In this case, they will be "re-balancing measures" to compensate for the losses occasioned by the block in operation since March 2001. But Washington, still undecided as to what to do, could start arbitration proceedings on the total of the damage, currently valued unilaterally by the Europeans at 2.2 billion dollars. This has arisen from meetings granted this week to Agence Europe by European and American official sources.
From an American point of view, for the moment there are only "retortion proposals", "and all overlook the considerable changes in operation since the safeguard measures were adopted" to increase the price of imported steel. "These retortion proposals presuppose that are surtaxes are still at their initial level, rather than the reduced rates in force since last 20 March", and they "take no account of the effect of excluding certain products".
The Europeans, however, do not see things the same way: they have not a draft, but a full Council regulation already published in the Official Journal, notified in Geneva and instituting, on the basis of the Safeguard Agreements (article 8), a re-balancing mechanism which will start automatically five days after the adoption of the definitive report of the Appeals Body, if this agrees with the arbitration panel (see EUROPE of 15 July, p.14)- as is usually the case- that the measures are "absolutely illegal", and if the United States "fail to change them" by then. "They will not be able to stop us", said a source in Brussels.
In America, where the White House is suspending its mid-term decision for the moment on whether to keep or abolish the steel surtaxes until Geneva makes its final decision, it has been pointed out that "retortion measures" can only be implemented once all possibilities for recourse have been exhausted, under WTO rules. It has also been noted that the "date (scheduled for the appeal verdict to be published) could change".