*EPF513 07/11/2003
Text: U.S. to Appeal WTO Ruling Against Steel Duties, Aide Says
(USTR spokesman says Section 201 duties will remain in place) (590)

An Office of the U.S. Trade Representative (USTR) spokesman says the United States will appeal a World Trade Organization (WTO) panel final ruling against U.S. imposition of temporary higher duties on steel imports under Section 201 of U.S. law.

Spokesman Richard Mills said in a July 11 statement, issued a short time after the panel's decision was released in Geneva, that the duties will remain in place. A spokesman for the European Union (EU), which brought the challenge to the WTO, said it stands ready to impose retaliatory duties on imports from the United States.

The WTO agreement allows such temporary safeguard duties to protect an industry from a surge of fairly traded imports but sets restrictions. While the United States argued that the Russian and Asian financial crises combined with a strong U.S. dollar and strong U.S. economy to produce an unexpected import surge, the panel decided that argument was not proved, not even that there was a surge.

The panel also rejected U.S. higher duty exclusions for free trade agreement (FTA) partners Canada, Mexico, Israel and Jordan even when the United States included imports from those countries to demonstrate an increase in imports.

Mills said the Section 201 duties, imposed in March 2002 and reduced by 20 percent in March 2003, do comply with WTO obligations and do work as intended to help the U.S. industry restructure. He added that imports from many developing countries and a number of steel products were excluded from the duties.

Joining the EU in bringing the challenge were Brazil, China, Japan, New Zealand, Norway, South Korea and Switzerland.

Following is the text of Mills' statement:

(begin text)

Statement of Richard Mills
USTR spokesman
July 11, 2003

Re: WTO panel report on U.S. Section 201 safeguard measures on steel products

"We are pleased that the panel rejected many of the challenges to the safeguard measures on steel products that the President imposed. However, where the panel found against the United States, we disagree, and we will appeal. In the meantime, the steel safeguard measures will remain in place.

"Safeguard measures are allowed under WTO rules. Many countries have used them. We believe the steel safeguard measures comply with our international obligations.

"In accordance with U.S. law and WTO rules, the safeguard is a temporary measure, designed to help domestic producers adjust to import competition.

"The tariff level is reduced by 20 percent every year. The first reduction occurred on March 20th.

"The steel safeguard measures are already working. The domestic steel industry has undergone an unprecedented level of consolidation and restructuring over the last year, making it more competitive with imports.

"The President has minimized the potential negative effects of the steel safeguard measures by excluding steel products if the exclusion would not undermine the safeguard. Last year, 727 exclusions were granted. In March, we granted 295 additional exclusions. For most of these, there was no opposition from domestic steel producers.

"In line with WTO rules and our own policy of assisting developing countries, imports from those countries were excluded unless they were more than three percent of total imports of a product. Our FTA partners (Canada, Mexico, Israel, and Jordan) were also excluded.

"The Administration has demonstrated its willingness to both defend and use these laws, and other trade remedy laws. We will continue to consider requests for safeguard measures from domestic producers."

(end text)

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

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