By Axel Bugge
BRASILIA (Reuters) - Brazil protested U.S. steel import barriers on Tuesday, threatening to take the case to the World Trade Organization (WTO) after U.S. Commerce Secretary William Daley failed to resolve the issue in a one-day trip to the Latin American giant.
Daley's visit to Brasilia on Monday was cut short when he was called back by President Clinton for a White House meeting on Internet security after a wave of hack attacks on popular Web sites, a U.S. Commerce Department spokesman said.
Even before Daley left the country, Brazilian officials were already venting their frustration at punitive steel tariffs announced by Washington last Friday.
In comments published by the local media Tuesday, Foreign Minister Luiz Felipe Lampreia was quoted as saying that the restrictions were the highest he had seen in his 30-year diplomatic career.
"I have never seen such flagrant discrimination regarding steel products by the United States market," Lampreia said. "In the last two years there has been a real blockade on the entry of steel products to the United States."
Development Minister Alcides Tapias said Tuesday that the only recourse left to Brazil to fight what it calls protectionism against steel imports was to go to the World Trade Organization.
"We must overcome these restrictions and we're thinking that the only solution might be joining Japan ... and taking a complaint to the WTO," Tapias said.
Clinton imposed tariffs last Friday on imported line pipe steel from various countries, including Brazil, in a move to protect the U.S. domestic industry and fend off a wave of cheap steel imports.
The move, which the United States says complies with WTO regulations against dumping, would hike tariffs on Brazilian steel by up to 19 percent.
Daley's visit to Brazil, which was part of a drive to boost trade ties in the wake of the failure of the Seattle world trade talks, was the first leg of a trip to Latin America. He is expected to resume the tour later this week.
Foreign ministry officials played down the trade spat and Daley's rushed departure.
"What must be very clear is that there is a problem regarding steel, but that doesn't mean that the relationship is in any way bad," said a ministry source.
He pointed to statements by President Fernando Henrique Cardoso's spokesman after the president's meeting with Daley.
Cardoso emphasized the "excellent stage of bilateral ties between Brazil and the U.S., which is at an important phase for the country," the president's spokesman said in his daily press briefing late Monday.
Above all, Cardoso pointed to mass U.S. investment in Brazil. U.S. companies were the largest investors in Brazil last year, helping to make Brazil the fourth largest recipient of foreign direct investment in the world.
Daley left behind a business delegation of 19 companies to travel to Sao Paulo to meet with Brazilian industry there Tuesday.:
