EU Says No Trade War with U.S. Over Steel

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Last updated at: (Beijing Time) Saturday, May 25, 2002

EU Says No Trade War with U.S. Over Steel

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European Union (EU) trade chief Pascal Lamy said Friday a dispute with the United States over steel tariffs was well short of a trade war but the 15-nation blocwould try to fight back with retaliatory measures if it had to.

The United States imposed duties of up to 30 percent on steel imports in March, angering many of its trade partners, including the EU. Several have complained to the World Trade Organization (WTO) and the EU has also threatened some 300 million U.S. dollars of sanctions from June 18.

"I never use the words 'trade war'. I do not use the word 'war'in relation to trade. War is far more serious," Lamy told a news conference after visiting steel company Arcelor's Sidmar plant near the Belgian town of Ghent.

Lamy said the EU was sticking to WTO rules and was not boostingtensions with the United States by linking steel to other commercial disputes. These include a dispute over the U.S. tax breaks to exporters, which the WTO has ruled against.

"If I linked the two this could indeed be seen as causing an escalation (in tension), but I am not doing that," he said.

The EU has said it would impose sanctions on a range of U.S. goods if the United States does not compensate it for the steel duties with lower tariffs on other imports.

"These negotiations (on compensation) are taking place. If theysucceed, that is all well and good. If not, then we will use the counter-measures that we have at our disposal," he said.

The European Commission (EC) has already presented a list of U.S. goods it wants to hit with 100 percent tariffs from June if it does not get compensation, but it will need approval from EU member states actually to go ahead with the sanctions measures.

Lamy, EC's trade commissioner, visited the Sidmar plant to get a feeling for how the U.S. tariffs had affected Europe's steel industry and to show solidarity with EU steel industry.

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