US-EU negotiations over steel tariffs and exemptions
The Bush administration's imposition of the US safeguard measures in the form of heavy tariffs of up to 30% for steel imports in March 2002 left the country in conflict with the EU. It appears that both parties still remain in a deadlock as no concrete sign of compromise is yet seen.
The US authorities argue that the safeguard measures are imposed with the purpose of protecting the domestic steel industry which EU and other
trading partners do not agree on.
Up until now no news of imporovement with regards to an agreement is seen however trade authorities from both parties state that through long negotiations they are trying to find a way to settle this dispute.
EU is prepared to slap retaliatory tariffs on US products yet postponed to put them in force until the entire picture of US product exclusions is revealed. It is reported that deadline for exemptions is July 3, 2002.
On the other hand the counter argument of the US is that it would be violating the WTO rules to impose retaliatory tariffs. Therefore their preference is the dispute to be handled by the WTO dispute settlement body but the process might take up to a year.
EU, while threatening US with the retaliatory tariff prospects, is at the same time being granted US product exemptions that appear to be upsetting the
US steel producers who claim that serious number of these exemptions involve products that are sufficiently produced in the country. They believe such exemptions damage the safeguard measures effectiveness.