WTO Launches Probe Into US Steel Tariffs

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Last updated at: (Beijing Time) Tuesday, June 04, 2002

WTO Launches Probe Into US Steel Tariffs

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The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) on Monday accepted the European Commission's request that a panel be established to judge the legality of the United States steel tariffs.

Trade diplomats said the three-member expert panel will determine by the end of this year whether the controversial tariffs are compatible with relevant international trade agreements.

The move marks the official start of WTO procedures aimed at brokering a deal in an escalating transatlantic dispute over steel trade.

The United States, on May 22, blocked a previous European Union request for an expert panel, but was unable to do so a second time under WTO dispute settlement procedures.

The EU, backed by South Korea, China and Japan, claims that the three-year tariffs of up to 30 percent protection of inefficient U.S steel producers from fair foreign competition are a clear breach of trade agreements.

But the United States holds that the adoption of the duties is a temporary measure, designed to safeguard its domestic industry from predatory pricing by foreign producers, until it has had time to restructure. "Safeguard" measures of this kind are permitted under WTO rules.

In a statement issued in Brussels, EU Trade Commissioner said: "I am in no doubt that the U.S. will lose this case."

The EU and the United States have 20 days to make a decision on the composition of the panel. If they fail to decide, the WTO Director-General will name the members.

At the DSB meeting on Monday, the U.S. blocked the first request for the establishment of a panel by Japan and South Korea.

A WTO official said that the DSB is due to hold a special meeting on June 7 to examine the first request for a panel set up by China, and a meeting on June 14 to examine the second request for a panel by Japan and South Korea.

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