EU establishing retaliatory tariffs on US goods
The Council of the European Union clearly stated that they believe the safeguard measures implemented by the Bush administration on March 20, 2002 in the form of raised tariffs or tariff quotas for steel products are causing serious injury to the EU producers, limiting exports to the US worth at least €2milion/year.
Despite all the discussions held with the US authorities an amicable solution has not been reached yet. Therefore the EU Council prepared to impose additional import duties ranging from 8% upto 100% covering a wide variety of products originating in the US and being imported each year into the EU. This imposition represents the suspension of a substantially equivalent trade concession in which the duties collected will not exceed the duties collected via the US safeguard measures.
The products involved in this sanction are majorly steel products, vegetables, fruits, tobacco, textile and furniture.
According to the EU statement, the US safeguard measures for some certain flat steel products are not implemented as a result of an absolute increase in imports. Therefore imposing retaliatory tariffs is not against the WTO rules. Rules allow in this case to implement additional custom duties as from June 18, 2002. However the intention of EU is to take into account the US decisions before they put these additional custom duties into force.
The procedure scheduled on June 13, 2002 in
Luxembourg to work as follows:
1. Under any circumstances the additional duties will come into effect in full from March 20, 2005 until the safeguard measures applied by the US is lifted. However in case the WTO Dispute Settlement Body (DSB) decides the US safeguard measures are violating the WTO rules the additional duties will immediately come into effect. The regulation adopted by The Council for Trade in Goods call for custom duties for certain products to be increased by a percentage in the range of 8%-100%. A report will be presented with regard to the latest state of discussions with the US by the Commission to the Council not later than July 19, 2002 Based on the US decisions until that date the Commission will determine the additional duties in Annex I to apply to US goods latest by October 12, 2002. If no economically meaningful product exclusion or a trade compensation by the US take place than the determinations by the Commission are to be made not later than August 1, 2002.
2. Additional duties listed in Annex II shall apply as from March 20, 2005 if economically meaningful product exclusions or trade compensations by the US are offered and if not same to apply from the fifth day following the date of WTO Dispute Settlement Body's decision that the US safeguard mesaures are not compatible with the WTO Agreement.
3. The Council will decide on the dismissal of the additional measures once the US safeguard measures are lifted.
A compilation of some US steel products listed in Annex I and II
Annex I-100%Additional Custom Duty for U.S. import Iron/Steel products
Flats - clad, plated,
coated of 600mm or more width
Stainless Steel – less than 600mm width
Stainless Steel - Bars and Rods, angles, shapes, sections
Structures - plates, rods, angles, shapes, sections, tubes
Tanks - similar containers up to 300l; excluding liquefied gas containers, other cast items.
Annex II-30% Additional Custom Duty for U.S.Import Iron/Steel products
Flats - clad, plated,
coated of 600mm or more width
Stainless Steel - 600mm or more width
Stainless Steel – less than 600mm width
Stainless Steel - Bars and Rods, angles, shapes, sections
Stainless Wire
Alloy Bars, rods, anlges, shapes and sections
Alloy
Wire
Flats - clad, plated,
coated less than 600mm width
Sheet-Piling Iron or Steel
Tubes, hollow profiles, seamless –related goods, including fittings;; excluding cast iron pipes
Structures
Tanks - similar containers over 300l
Compressed or Liquefied Gas Containers - related products
Stranded
Wire - similar items included, exception: electrically insulated
Fencing - related products
Chains - Screws and related products
Springs - leaves for springs
Stoves
Radiators - non-electric
Kitchen
Sanitary ware