Agence France Presse | March 19, 2002
The European Union and the United States began initial consultations here on Tuesday about EU claims for compensation for US tariffs on imported steel, 24 hours before the US measures are due to take effect.
Brussels and other World Trade Organisation (WTO) member countries reject the US tariffs. EU and US officials did not comment as they entered the talks, scheduled to run through the morning at the EU council offices in Geneva.
The EU is claiming compensation under the WTO's safeguards agreement which states that countries can claim compensation for the amount they believe their exports are harmed by the measures.
If the US refuses, the agreement allows for the EU, under certain conditions, to take retaliatory action.
The EU estimates it is entitled to compensation of up to 2.4 billion euros (2.1 billion dollars), according to European sources.
It complains the US measures could not only lead to a drastic reduction in its exports to the US market, but also substantial trade diversion to the EU market from third countries.
Washington announced on March 5 it would impose tariffs of up to 30 percent on certain steel imports by Wednesday.
The EU last week insisted it would pursue claims for initial compensation at the talks in Geneva.
In a letter to his US counterpart, EU Ambassador to the WTO, Carlo Trojan, said: "The decision is bad for the US economy, bad for the international steel market and bad for the world trading system."
The EU has also lodged a complaint about the US measures under the WTO's dispute settlement system to check whether they conform to global trade rules.Agence France Presse:
