*EPF403 08/22/2002
Text: U.S. Completes First Stage of Steel Tariff Exclusion Process
(Exempts additional 178 products from extra duties) (890)

The Commerce Department and the Office of the U.S. Trade Representative (USTR) announced they have completed the first stage of the steel tariff exclusion process initiated when President Bush in March imposed temporary duties ranging to 30 percent on steel imports under Section 201 of U.S. trade law.

In an August 22 news release the department said that the seventh and final set of exclusions covers 178 steel products. These products are excluded because they are not available in the United States in sufficient quantities and their exemption does not undermine the effectiveness of the steel remedy, the department said.

In making the decision, Commerce and USTR took into consideration information provided by U.S. and foreign steel producers as well as U.S. steel consumers, the department said.

President Bush imposed the remedy for three years to give the beleaguered U.S. steel industry an opportunity to restructure. Recently his administration asked steel companies to provide reports in September 2002 and March 2003 on the steps they are taking to achieve this goal. Under the law the president may reduce, change or end the safeguard action if the steel industry fails to make adequate efforts to become more competitive. He will have an opportunity to do so during a midterm review of remedy effectiveness in 2003.

U.S. trading partners criticized the tariffs imposed in March as a protectionist measure and threatened to retaliate. When the United States started granting exclusions from the duties, however, the European Union and Japan took a more cautious wait-and-see approach and retreated from threats of immediate sanctions.

Most of the 727 exclusions that have been granted since March 5 were requested by European and Japanese producers or by U.S. consumers of their products, said a U.S. trade official during an August 22 teleconference press briefing. The exclusions amount to approximately 25 percent (3.2 million metric tons) of the 2001 import volumes of steel covered by the Section 201 measure, the administration said.

In November the administration will give domestic consumers and foreign producers of steel products another opportunity to request exclusions, thus initiating the second stage of the exemption process, the department said.

Following is the text of the news release:

(begin text)

U.S. Department of Commerce
International Trade Administration
August 22, 2002

DEPARTMENT OF COMMERCE AND USTR ANNOUNCE FINAL SET OF PRODUCTS TO BE EXCLUDED FROM SAFEGUARD ON STEEL PRODUCTS

Today the Department of Commerce and the Office of the United States Trade Representative announced the release of the seventh and final set of products to be excluded from the safeguard measure on steel products this year.

In accordance with World Trade Organization rules designed to allow for the temporary restructuring of a domestic industry, the President announced temporary steel safeguard measures on March 5, 2002. The President directed the Department of Commerce and the Office of the United States Trade Representative to consider requests to exclude certain products from the safeguard action. In addition, parties were invited to submit new product exclusion requests by May 20, 2002.

The President's March 5 announcement set a July 3, 2002, deadline for completing this process and publishing a complete description of granted pending product exclusion requests in the Federal Register. In a proclamation signed on July 3, 2002, the President extended the deadline for processing exclusion requests to August 31, 2002.

Today, 178 products were excluded because it was determined that they are not sufficiently available from U.S. producers and that excluding these products would not undermine the effectiveness of the safeguard on steel products. The decision to exclude these products was based upon a full consideration of information submitted by U.S. steel consumers, U.S. steel producers and foreign steel producers. This is part of the Administration's objective of providing relief only where needed in the steel industry and to avoid burdening U.S. steel consumers. A list and a short description of the excluded products may be found on USTR's Web site: www.ustr.gov.

Including the exclusions announced today, a total of 727 products have been excluded from the steel safeguard measures since they were announced on March 5, 2002.

This concludes the review of all pending exclusion requests that were filed on or before May 20, 2002. There will be another opportunity later this year for parties to submit exclusion requests for consideration by March 2003. This process will be initiated in November 2002.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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