Japan, S. Korea File WTO Case Over U.S. Steel Tariffs

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Last updated at: (Beijing Time) Thursday, March 21, 2002

Japan, S. Korea File WTO Case Over U.S. Steel Tariffs

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Japan on Wednesday joined the European Union in filing a complaint with the World Trade Organization (WTO) over hefty U.S. tariffs on steel imports just hours after they took effect in the United States.

South Korea also took a similar step, sparking the threat of a global trade war as the EU took its case to the Geneva-based world trade watchdog earlier this month.

The EU, Japan, South Korea and other steel exporting countries, including Brazil, Australia, New Zealand, Switzerland and China, say the U.S. ''safeguard'' measure violates WTO rules on the grounds that U.S. steel imports have been declining since their peak in 1998.

Japan, taking a safeguard case to the WTO for the first time, is considering imposing retaliatory tariffs on U.S. exports, as the WTO dispute-settlement process usually takes nearly two years, Japanese officials said.

''The U.S. measure does not satisfy conditions required by WTO rules. We also cannot overlook it from the viewpoint that the WTO regime should be maintained and enhanced,'' Japanese Chief Cabinet Secretary Yasuo Fukuda said at a press conference.

Anticipating some impact on the new trade round the WTO launched last November, Japanese Economy, Trade and Industry Minister Takeo Hiranuma said, ''We have to defend the world's free trade system. It should not be undermined.''

On retaliatory tariffs Japan is considering, Hiranuma merely said, ''We reserve the right permitted under WTO rules and will invoke it when time comes.''

If Washington fails to respond by April 13 to a Japanese request that it compensate Japan for damage by lowering tariffs on other Japanese exports, Tokyo believes it will be justified in levying retaliatory tariffs on U.S. exports, one official said.

Hiranuma also called on other steel exporting countries to join in taking issue with the U.S. tariffs of up to 30% at the WTO.

Under the WTO dispute-settlement system, Japan and the U.S. will first hold bilateral talks.

If they fail to settle the issue within 60 days, Tokyo will ask a WTO panel to decide whether the U.S. measure complies with WTO accords.

The WTO permits a member to invoke its safeguard mechanism to protect a domestic industry for up to four years if it is threatened by an import surge.

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