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EU: Commission Announces Own Steel Tariffs, Attacks U.S. Protectionism

Brussels, 27 March 2002 (RFE/RL) -- The European Commission today said it has approved safeguard measures to restrict steel imports that will take effect tomorrow.

Announcing the decision, the president of the European Commission, Romano Prodi, said the measures will not last "a day longer" than the tariffs the United States imposed on its steel imports earlier this month.

Prodi said the measures are not meant to question what he called the "close relationship" between the EU and the United States. But he said the EU must protect its markets from steel imports diverted from the United States.

"The European Union is not seeking confrontation. We are quite simply defending -- as we have to do -- our natural interests, the interests of European industry, because I repeat: We believe this is our duty and the right thing to do."

EU Trade Commissioner Pascal Lamy said the EU safeguard tariffs will only apply to steel imports exceeding 2001 levels, when he said EU steel imports were at their highest. Once steel imports go beyond these levels, tariffs will be applied for an initial duration of six months, varying from 14.9 percent to a maximum of 26 percent. After the six-month period, the commission will decide whether to continue or modify the measures.

Lamy said the EU measures will act as an "air bag" for the bloc's steel market, "biting" only if 2001 levels are exceeded. He compared this to the U.S. policy of applying tariffs to all steel imports -- as he put it -- "from ton one."

Lamy also repeated the EU position that U.S. tariffs on steel imports are not justified as American steel imports have fallen by a third in the last three years. He said that, respecting World Trade Organization rules, the EU has "effectively exempted" developing countries from the measures. He also said the access of candidate countries' steel exporters to EU markets should not be affected.

Although Prodi repeatedly said the EU is not seeking confrontation with the United States, he made it clear that today's decision is part of a longer-term strategy of asserting the EU's independence from the U.S. He compared the measures announced today to the EU's decision yesterday to go ahead with the Galileo satellite navigation system.

"It is also about Europe standing on her own feet and not letting someone else dictate our agenda. I want to [remind] you of yesterday's decision on Galileo that serves as a powerful reminder of our ability to promote the interests and the long-term goals of Europe."

The United States had long opposed the decision on Galileo, citing security concerns and offering the EU the services of its existing global positioning system free of charge.

However, commission background documents accompanying the Galileo decision yesterday said the EU suspects the offer -- like other previous offers of free services -- was an attempt by the United States to prevent the EU from acquiring strategic technologies.

Today, Prodi also issued a strongly worded warning to U.S. President George W. Bush, urging him not to "proceed any further down the path of letting short-term domestic interests dictate trade policy." Prodi went on to say that protectionist measures are not a solution to the ills currently affecting the U.S. steel industry, or any other sector.

Prodi's warning was echoed by Trade Commissioner Lamy, who said the United States appears to be suffering from what he called a "tropical fever" of protectionism that has never been properly cured. The EU, on the other hand, was vaccinated against the disease a decade ago, Lamy said.