Agence France Presse | March 4, 2002
US Trade Representative Robert Zoellick defended the US right to curb steel imports in a letter to European trade chief Pascal Lamy, a copy of which was released Monday.
The letter, dated February 28, was released by the US Trade Representative's office just two days before a US decision on possible tariffs and quotas on steel imports.
President George W. Bush's is to make the announcement Wednesday following a finding that steel imports have damaged the US industry. He is widely expected to impose some form of tariff protection to safeguard the US steelmakers. Zoellick's letter to European Trade Commissioner Lamy, who is a personal friend, recalled that European Union had provided more than 50 billion dollars to help its steel industry restructure in the 1980s.
He said the European Union also had implied more recently that it may take action to shield its own industry.
"Given the EU's past and presence practices in the steel sector, I had hoped that you might show greater appreciation for the US interest and need to consider safeguards as our industry restructures," Zoellick wrote.
"While the president has not yet made his decision, I would note that the WTO expressly permits the safeguard measures to allow an industry injured by imports temporary relief and time to restructure," he added.
"Many other countries -- for example, Japan, Korea, Brazil and others -- have used safeguards in recent years or are relying on them today," Zoellick said.
Bush's advisors worked through the weekend to draw up a series of options before the president's decision is announced, a report in the Wall Street Journal said.
The president likely would slap tariffs of 20-30 percent on imports such as bulk coils of rolled steel -- a major product from Asia, Latin America and former Soviet countries, the paper quoted US administration officials as saying.
More sophisticated steel products would be subjected either to quotas or a mixture of tariffs and quotas, it said. But many other steel products would be exempted from any import barriers.
Bush was likely to reject industry efforts to have the government assume the massive pension and health liabilities of failed steel makers, The New York Times said in a separate report.
The so-called legacy costs are estimated by analysts to total about 13 billion dollars.
Zoellick appeared to argue against the need for the government to pick up the legacy costs.
"While not steel specific, the United States already has a pension insurance program funded by company contributions," he said in the letter to Lamy.
"We also have programs, such as Trade Adjustment Insurance, to aid workers who lose their jobs due to trade and we are looking at other programs that might assist displaced workers with health care costs."
Bush's decision is to be taken under Section 201 of the 1974 trade law, which lets the president impose punitive tariffs on imports found to have caused injury to the domestic industry.
The largest US steel makers are calling for a 40 percent tariff on virtually all steel imports.
In December, the quasi-judicial International Trade Commission recommended Bush impose tariffs ranging from 20 to 40 percent on certain types of steel product.
But foreign steel manufacturers and domestic US steel consumers such as car manufacturers are hotly opposed to such protection.Agence France Presse:
