| Author (Person) | Bower, Helen |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 11.6.02 |
| Publication Date | 11/06/2002 |
| Content Type | News, Overview, Topic Guide | In Focus |
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Foreign ministers from the EU's Member States, meeting at the General Affairs Council in Luxembourg on 10 June 2002, agreed to support the European Commission's proposal to impose custom taxes on imports of certain products originating from the United States of America. The retaliatory action follows President Bush's decision on 5 March 2002 to impose tariffs on US steel imports. The European Union is set to be seriously affected because it accounts for more than 25% of American imports of flat and tin mill products, on which 30% tariffs are applied. The US tariffs could mean a loss to the industry of up to 4 million tonnes in exports to the US and the EU also fears that 16 million tonnes of steel from elsewhere will find its way to the EU because it can't get into the US market. Following President Bush's decision the European Commission immediately lodged a complaint with the World Trade Organisation whose appellate body condemned the move. A bilateral consultation phase was set up and, on 11 and 12 April 2002, joint dispute settlement consultations were held in Geneva, between the EU, Japan, Korea, China, Switzerland and Norway on one side and the United States on the other. However no agreement was reached and so the Dispute Settlement Body of the World Trade Organisation agreed to establish a WTO dispute panel on 3 June 2002 after a second such request from the European Union. Brazil, Chinese Taipei, Switzerland, Norway, Japan, Korea, Thailand, Canada and China, who are all also set to suffer from the US steel import tariffs, have requested to be third parties. Pending the outcome, the European Commission announced that it would continue to take all necessary measures to defend European interests hence the decision to impose retaliatory tariffs. The European Commission has to inform the World Trade Organisation by 18 June 2002 in order to meet the deadline set out in the World Trade Organisation Agreement on Safeguards. The EU foreign ministers agreed to authorise the European Commission to do this but was unable to formally adopt the decision because the Danish minister was held up by reservations expressed by the Danish Parliament scrutiny committee. The list of US products subject to customs duties is now expected to be formally adopted at the justice and home affairs meeting, on Thursday 13 June 2002. Even once adopted Pascal Lamy, the European Commissioner for trade has signalled that they would not be applied until mid-July because the European Union is still hoping to reach a settlement with the United States. Indeed the foreign ministers hope that the decision to impose retaliatory tariffs will show the US that the EU is determined to retaliate to unfair and unilateral measures and will therefore encourage the United States to negotiate. However if no agreement is reached then the foreign minsters will probably vote in July on whether to proceed with the retaliatory duties and if there is a majority in favour then sanctions could be applied the following month. Currently, the US is trying to win over some EU governments by offering their steelmakers targeted exemptions from its own import duties. Even If no agreement is reached between the EU and the US, the EU is confident that the WTO will rule against the US measures because they fail to meet the most elementary requirement for a safeguard action - a recent surge in imports. Moreover, US safeguard measures have already been condemned by the WTO on all six occasions when they have been considered by a Panel. A definitive verdict is expected from the WTO dispute panel in the second half of 2003. Links: Council of the European Union: European Commission:
World Trade Organisation: European Sources Online: Financial Times:
BBC News Online:
European Sources Online:
Helen Bower At the General Affairs Council in Luxembourg on 10 June 2002, EU foreign ministers agreed to support the European Commission's proposal to impose custom taxes on imports of certain products originating from the US in retaliation for the US steel import tariffs. |
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| Subject Categories | Business and Industry |
| Countries / Regions | United States |
