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Experts Debate WTO Ruling on US Steel Tariffs - 2003-08-05


A Washington forum Tuesday discussed the controversial protective tariffs for the U.S. steel industry which have been declared illegal by the World Trade Organization. The dispute goes on as the Bush administration is appealing the WTO ruling.

Trade lawyer Richard Cunningham says the 30 percent tariffs imposed on a range of steel imports last year have contributed to a necessary restructuring the of the American steel industry. There have been dozens of consolidations and several major steel producers have gone out of business. The surviving U.S. industry, he says, is now fully competitive and soon no longer need special tariff protection.

The WTO ruling that the U.S. tariffs are illegal could result in other nations imposing similar penalties on U.S. products. With the U.S. tariffs due to expire in early 2005, trade lawyer Cunningham says the lengthy appeal process calls into question the effectiveness of WTO rulings.

"The problem with safeguards (the U.S. protective measure) is that safeguards are temporary in nature. And if you have to go through 18 months of deliberations in the WTO before you're authorized to retaliate, then the retaliation is a nullity because the protective action would be all over," he said.

It is the 15 European Union nations that have been most adversely impacted by the U.S. protective measures.

Mitch Hecht of the ISG steel group in the United States is hopeful that the safeguard's protection will run its full course.

"I think we did put a program in place that the president said would last until early 2005 to allow us to finish the job we started [to restructure]," he said. "And I'm just hoping that we don't take that protective measure off prematurely because we don't know what is going to happen at the end of this year."

The steel industry worldwide has excess capacity. Overproduction has led many companies to sell products at whatever price can be obtained. The United States is the world's largest steel importer. The Bush administration says the protective measures were needed to give the beleaguered U.S. steel industry time to adjust.

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