- The Washington Times - Wednesday, May 15, 2002

From combined dispatches
BRUSSELS The European Union announced plans yesterday to slap retaliatory tariffs on $341 million worth of imports from the United States in its dispute over U.S. steel tariffs imposed March 20.
Spokesman Anthony Gooch said the European Commission, the 15-nation European Union's governing body, has given the World Trade Organization an initial list of American products including cigarettes, frozen vegetables and paper products that are candidates for import duties. It had until Friday to file the list.
The European governments are to say next month whether they will go ahead with retaliatory measures in response to Washington's decision to impose 30 percent steel tariffs on most imports.
They say the American tariffs are illegal under WTO rules.
To get President Bush to remove them, they have drafted a list of goods produced in politically sensitive U.S. states where Mr. Bush is campaigning for Republican candidates in midterm congressional elections.
In recent weeks, the 15 European governments have fine-tuned the list.
Taken off were bed linens and Harley-Davidson motorcycles. The number of types of fruit juices to be targeted have been cut from six to three. These would have 100 percent tariffs.
Added to the product list have been toilet paper, account books and uncoated paper all facing 15 percent tariffs as well as cigarettes, at 30 percent.
In case the WTO makes a definitive ruling that the U.S. steel tariffs violate its trade rules, the European Union also filed an additional list of American imports worth $547 million that would face EU duties.
A final WTO ruling on the legality of the American tariffs, however, is not expected for at least two years.
U.S. officials were not surprised by the European Union action but expressed doubt about whether its foreign ministers would agree to retaliate at a meeting June 10 in Luxembourg.
Europe has said the U.S. steel duties were wrongly applied. Washington said the tariffs were necessary to protect its industry from cheap imports.
The European Union has also demanded that the United States provide compensation for lost trade in steel, saying it wants the U.S. government to reduce import duties on a variety of products. So far the United States has refused.
Europe said yesterday that it will scrap planned sanctions if the United States offers compensation by the end of the week.
South Korea is also asking for compensation. Yesterday it said that it has filed a request with the World Trade Organization and the United States for U.S. compensation for tariffs on South Korean steel exports to America.
"The Korean government seeks compensation from the United States we already applied last week for $170 million for the current year," said Shin Kook-hwan, minister of Commerce, Industry and Energy, in an interview.
Speaking just prior to a meeting yesterday with Trade Representative Robert B. Zoellick, Mr. Shin said that his government "will comply with WTO provisions" and has begun what could be a two-to-three year process seeking compensation.
Last year South Korea sold $1.1 billion worth of steel to the United States, Mr. Shin said. The new tariffs will affect from $700 million to $800 million worth of steel.
Staff writer Ben Barber contributed to this report from Washington.

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