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Brazil Considers US Steel Tariffs 'Unacceptable' - 2002-05-07

A top Brazilian official says the recent decision by the Bush administration to impose tariffs on most steel imports is unacceptable and must be resisted. The official Tuesday described the U.S. move as "protectionist".

In a Rio de Janeiro speech, Brazilian Finance Minister Pedro Malan described the tariffs as a form of protectionism disguised as industrial policy. He said, "The United States is refusing to do what Brazil has done to make its steel industry competitive. He went on to say Brazil consolidated and privatized its steel industry in the early 1990's, reducing the number of companies from 30 to 12, to make it more efficient."

In March, the Bush administration enacted import tariffs of up to 30 percent on most foreign-made steel in a move welcomed by the U.S. steel industry. U.S. embassy spokesman, Terry Davidson, says the United States acted within the bounds of World Trade Organization regulations on safeguarding a domestic industry, adding the action should not be considered protectionist.

"The whole idea of safeguards," he said, "is to prevent increased flows of imports to destroy a sensitive industry, and the U.S. was well within the WTO regulations to study the impact of steel imports into the U.S. market and to determine whether a temporary safeguard was warranted. I stress temporary because these are safeguards, these are not protectionist barriers that are set up to stay in place. They are designed to provide a cushion for an industry that is going through transition."

The spokesman said an effort was made to minimize the impact on Brazil - pointing out that 87 percent of Brazil's exports to the U.S. market will not be affected.

Last year, Brazil exported 3.2 million tons of steel to the United States, its largest market. It is estimated the Brazilian steel industry could lose up to $500 million because of the new import tariffs.