UPDATE 2-EU draws up U.S. sanctions list in steel row
Reuters, 03.22.02, 2:58 PM ET
By Patrick Lannin
BRUSSELS, March 22 (Reuters) - The European Union's executive arm said on Friday it had drawn up and sent to EU member states a list of U.S. goods it will hit with around $2.0 billion of trade sanctions in a row with Washington over steel.
President George W. Bush has infuriated the EU by setting tariffs of up to 30 percent on steel from Europe, Asia and Latin America, to help struggling U.S. steel producers.
The European Union (EU) has said it will retaliate against U.S. goods if Washington fails to compensate it by reducing import duties on other items. The EU also intends to launch protective measures to protect its own steel makers.
"The Commission has today provided member states with what it considers would be an appropriate list to be submitted to the WTO (World Trade Organisation) in order to protect our rights in the future to be able to impose counter measures on the United States over steel," said Commission spokesman Anthony Gooch.
He declined to give further details, but an EU source said the list included steel, textiles, citrus products and items such as paper, rice and motorcycles.
The source said the list was a detailed breakdown of each item to be hit by tariffs ranging from 30 percent to 10 percent.
This would be roughly in line with the U.S. steel duties announced by Bush of up to 30 percent.
EU member states will look at the list and decide whether to back it or drop items. The list has to go to the WTO by May 20.
The WTO, refereeing in the trade dispute, has already heard appeals from the EU, Japan and Australia to have the U.S. steel duties overturned, although a decision could take a year.
The compensation demand and possible retaliation are also part of EU tactics. The EU has said retaliatory sanctins would only be used if the United States refuses compensation.
POLITICAL STRATEGY
A Wall Street Journal report said EU retaliation would target goods from states which are politically sensitive for President George W. Bush, such as Florida, Wisconsin, Pennsylvania and West Virginia, where Bush battled for his victory by a razor-thin margin in the 2000 election.
The list could include Harley Davidson Inc (nyse: HDI - news - people) motor bikes and orange juice. The newspaper said the strategy was to get the White House to change course on the steel tariffs by hurting regions and companies the Bush administration needs politically.
While refusing to comment on any political motive, Gooch said the United States had used such tactics in past disputes with the EU over bananas and hormone-treated beef. It had targetted French cheese and wine because Paris was seen as driving European protectionism.
The Commission is also drawing up plans for steel quotas and tariffs, known as safeguard measures, to protect Europe from a surge of steel imports barred from the United States. |
