Prodi calls on Bush to scrap steel duties as EU unveils safeguard plan

Date: 28/03/02

By Peter Chapman

EUROPEAN Commission President Romano Prodi has issued a last-minute appeal to George W. Bush to scrap plans to slap duties as high as 30 on steel imports.

The plea came as Brussels outlined plans yesterday (27 March) for safeguard measures to protect European steel makers from a possible influx of imports diverted to the EU.

'I...appeal to President Bush and his administration to not proceed any further down this path,' said Prodi. 'We all have our legitimate interests to preserve. But we must not let short-term domestic interests dictate our policy nor should they be allowed to jeopardise the functioning of the market.'

Prodi, who was chairman of the Italian Institute for Industrial Reconstruction (IRI) during the late 1980s and mid 1990s, said he had to take tough action to make Italian steel competitive - and that Bush should do the same.

'I have personally spent years of my life in Italy rationalising the steel industry so that it could survive the challenges of global competition. I know how it feels when thousands of people are protesting because they're afraid of losing their jobs.

'But I also know, as I knew already then, that certain things have to be done so that the industry can compete in an open market.' This would reap benefits for 'a much bigger number of workers and their families'.

Under this week's move, Prodi and Trade Commissioner Pascal Lamy said provisional safeguard measures would apply to 15 steel products that are subject to increased US tariffs and for which EU imports have been on the rise.

They take the form of duties of between 14.9 and 26 on imports above quotas set at 'around the 2001 level'. Experts said 2001 was a bumper year for imports - meaning the impact of the EU measures is likely to be limited.

But Prodi insisted the EU was not being hypocritical by responding to US duties with its own protectionism.

He said developing countries exporting small amounts of steel would be exempt from restrictions, and that the duties would be 'non-discriminatory'.

He said the tariffs would last for 200 days, during which time the Commission will conduct a detailed investigation before deciding whether to propose that these measures should remain in place, be modified or withdrawn.

'Let me assure you that in no case will our measures last a day longer than those of the Americans,' he added.

Lamy confirmed that a list was being drawn up of potential US targets for punitive import restrictions if EU attempts to win compensation from Washington fail. He said it would be a 'clever list' that would not harm EU business but would wield the 'maximum leverage' in the US.

An early draft included Harley-Davidson motorcycles, steel and citrus fruit products.

European Commission President Romano Prodi has issued a last-minute appeal to US President George W. Bush to scrap plans to impose duties as high as 30% on steel imports.