- The Washington Times - Saturday, March 9, 2002

BRUSSELS (Agence France-Presse) The European Commission said yesterday it is drafting safeguards to protect European steelmakers from a feared flood of cheap imports once U.S. steel tariffs go into effect in two weeks.

Anthony Gooch, spokesman for EU Trade Commissioner Pascal Lamy, told reporters that trade officials from the 15 member countries of the European Union would discuss the steps at a meeting in Brussels on Tuesday.

"That's where we'll set out what preparations we've done and how we would go about invoking safeguard measures for our market, if and when we see a surge of imports from countries that aren't able to put their steel into the United States," Mr. Gooch said.

The European Union also will set up a panel to examine compensation, he said.

"Our measures would not be intended to close our market … but maintain the current levels of access to our markets," he said. "What we are not willing or able to do is take on board the excess steel that the Americans have closed out of their market."

The European Union, the world's top steel importer, is leading an international outcry against President Bush's decision on Tuesday to slap tariffs of up to 30 percent on most steel imports starting March 20.

In a separate steel case, the World Trade Organization (WTO) ruled against the United States in a complaint brought by South Korea, finding that the United States had failed to justify tariffs on the entry of South Korean steel pipes, WTO sources said yesterday.

The international body concluded that the United States, in taking action against South Korean steel, was unable to show a connection between the imports and difficulties confronting the U.S. steel industry.

While Mr. Bush is exempting free-trade partners Canada and Mexico from the sanctions, along with a handful of minor steel exporters, Mr. Gooch said any EU safeguards would not discriminate among nations.

Most EU steel imports come from Central Europe and Eastern Europe, including countries that are negotiating to join the bloc in 2004. EU steel tariffs, already minimal, are to be phased out in 2004.

Mr. Bush has said that tariffs are needed to protect the U.S. steel industry from low-cost foreign competition, but the European Union contends that the tariffs are illegal under WTO rules.

Mr. Gooch confirmed that the European Commission had asked the WTO on Thursday for consultations with the United States, an important step toward a WTO panel that would rule on the legality of Mr. Bush's decision.

Japan also has filed the initial complaint.

But in the meantime, Mr. Gooch said, Europe has systems in place to see if steel from such places as Russia, Asia and Latin America would start swamping Europe if they are priced out of the United States by the tariffs.

"We keep tabs on what's coming in," he said. "If we feel that there is a substantial, unexpected increase in normal levels of steel imports, then we under WTO rules are entitled to take safeguard measures."

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