- The Washington Times - Tuesday, June 11, 2002

LUXEMBOURG (AP) EU foreign ministers backed proposals yesterday calling for retaliatory tariffs on U.S. exports despite conciliatory moves by the United States to exempt some European steel products.
Spanish Foreign Minister Josep Pique told reporters there was "unanimous support" for the measures among the 15-nation bloc.
EU Trade Commissioner Pascal Lamy said the decision yesterday would send a "clear political signal" to Washington that the EU would stand united and not be lured into seeking individual deals.
"We are not upping the ante, but we are showing firmness," Mr. Lamy said.
The European Union is challenging the Bush administration's imposition of punitive tariffs on imported steel at the World Trade Organization but is moving to enact measures of its own while the case is heard.
It says the American tariffs are illegal under WTO rules.
WTO rules allow the European Union to impose retaliatory measures if no deal for compensation usually lowering tariffs or raising quotas on other imports by a comparable amount is reached with the United States.
The EU executive commission has drawn up two lists of products that could be hit with retaliatory tariffs of as much as $888 million.
Despite the tough talk, Mr. Lamy said efforts to reach an amicable compromise with Washington over steel were "starting to bear fruit." He declined to elaborate.
Mr. Lamy said the European Union would file the lists at the WTO in Geneva this month but added that EU governments would not decide whether to implement the shorter list, worth $341 million, until mid-July.
Friday the U.S. Commerce Department announced it would exempt 61 products of imported steel from the tariffs and might add more before a July 3 deadline. Forty companies in Germany alone have applied for exemptions.
U.S. trade officials said Washington was willing to exempt European steel products from the 30 percent tariffs because certain EU steel products served "niche markets" not served by U.S. steelmakers.
"Some of these exemptions are being asked for by American exporters," Mr. Lamy said.
The European Union has said it might impose the short list of tariffs, which includes a range of products such as Florida orange juice, frozen vegetables paper products, if it finds the United States "has not decided on economically meaningful product exclusions."
If the WTO rules that the U.S. steel tariffs violate its trade rules, the European Union could impose a longer list of American imports this one worth $547 million that would face European duties.
A WTO decision is not expected for two years.


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