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US Envoy Defends Steel Tariffs - 2002-04-11

The top U.S. trade envoy defended Washington's recent decision to impose tariffs on steel imports. He spoke Thursday during a visit to Japan, one of several countries that have criticized the U.S. move.

Trade Representative Robert Zoellick told reporters in Tokyo that the steel tariffs are in line with World Trade Organization rules. He also accused Japan of protecting its own steel industry while dumping cheap steel in the United States. "In Japan's case, its record on steel has been deeply disappointing," he said. "If you look at the basic strategy of Japanese steel, it has been to shelter the domestic market through anti-competitive practices, and then to try to sell low-cost steel in external markets through exports. That is not going to be a successful 21st century strategy."

Earlier Thursday, Mr. Zoellick met with Japanese Trade Minister Takeo Hiranuma, who reiterated Tokyo's desire to see the tariffs lifted. Mr. Hiranuma also said Japan would consider slapping retaliatory tariffs on U.S. products if the issue is not resolved soon.

A WTO panel in Geneva was meeting later Thursday to try to settle the dispute. China, South Korea and the European Union are also protesting the steel tariffs, which took effect last month.

Mr. Zoellick also warned that the United States sees Japanese restrictions on imports of U.S. apples and poultry as possible WTO violations.

He urged Japan not to rely on exports to solve its economic woes. He described the country's economy as rigid and said investment capital needs to flow to new, productive sectors. "There is a lot of capital still allocated in Japan to industries that are not going to be in the forefront in the future but have various [political] connections," he said.

Japan is in its worst recession in a decade, with its banking sector overwhelmed by bad loans. The United States has encouraged Japan to solve the bad debt problem and further deregulate industries to encourage an economic recovery.

Also Thursday, the Japanese Finance Ministry said the nation's current account surplus, the broadest barometer of trade, rose 3.9 percent in February from the same time last year. That makes the fifth straight monthly increase. Finance officials noted that an improving U.S. economy helped boost the surplus.

Before wrapping up his Asia tour in Japan, Mr. Zoellick visited China, Singapore, Thailand and Indonesia.