U.S. to appeal WTO ruling
By Robert Manor
Chicago Tribune
The World Trade Organization ruled yesterday that tariffs on imported steel imposed by the Bush administration violate international agreements, opening the way for retaliatory trade restrictions against American goods sold in Europe and Asia.
U.S. officials promised to appeal the decision and said the tariffs — which went as high as 30 percent for some types of steel — will remain in place for now.
The appeal will aggravate and lengthen an already epic trade war with the European Union, which yesterday threatened more than $2.2 billion in trade retaliation on American agricultural and retail products. The administration's response could also affect President Bush's re-election prospects.
The Bush administration defended the tariffs — imposed in March 2002, fulfilling campaign promises that helped secure votes in key steel-making states — as the kind of "safeguard" measure allowed by WTO rules for the temporary protection of a domestic industry hurt by unforeseen developments.
But a three-member panel of trade experts said in a 968-page ruling that the safeguard claims were not substantiated sufficiently. Yesterday's ruling confirmed the interim decision the WTO released in March, upholding complaints filed by the European Union, Japan, South Korea, Norway, Switzerland, China, New Zealand and Brazil.
The WTO panel said the United States failed to prove that a flood of cheap imports had harmed the domestic steel industry — a qualification for safeguard duties. It also said the United States illegally excluded import products from countries with which it has free trade agreements, such as Canada, Mexico, Israel and Jordan.
Steel industry advocates denounced the WTO ruling as an infringement of the nation's independence.
"How long will we allow our laws to be violated before we recognize that the WTO is pre-empting national sovereignty and the right of the president to defend the country's economic security?" asked Leo Gerard, president of the United Steelworkers of America. Gerard's union represents workers in an industry that struggled through major consolidations last year and has lost more than 50,000 jobs since 1998 when steel prices began to plunge and the first of 35 steel mills seeking bankruptcy protection filed.
"We are pleased that the Bush administration is appealing this decision," said Toni Cole, spokeswoman for the American Iron and Steel Institute, which represents the interests of domestic steelmakers.
The steel industry argued at the time that foreign mills, unable to find a local market for their steel, were dumping it in the United States below their cost of production. Companies wanted protection and time to merge companies to become more competitive.
Bush approved three years of tariffs to allow for reorganization and consolidation in an industry that remains a potent political force in Pennsylvania, West Virginia, Indiana, Alabama and several other states.
The administration had already said it would review the need for the tariffs in September at the halfway mark.
Any appeal likely will be decided in a few months. However, the WTO, historically, has ruled against countries that impose tariffs.
