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EU Postpones Trade Sanctions Decision on Steel Imports - 2002-07-19

The European Union's executive commission has proposed that the 15-nation group delay until September 30 a decision on applying trade sanctions against the United States in retaliation for U.S. tariffs on imported steel. EU diplomats say member countries will endorse the decision when their foreign ministers meet in Brussels on Monday.

The European Commission, which negotiates trade agreements on behalf of EU member states, says it is not backing away from its threat to increase customs duties on imports from the United States following Washington's decision to impose tariffs of up to 30 percent on steel imports.

But it says it is postponing its decision to retaliate because it has received what Peter Carl, the commission's trade director, calls "positive signals" from the United States.

Earlier Friday, the Commission said it had received word from Washington that the United States is exempting 14 types of European steel products worth $60 million from its tariffs. That brings the total amount of exemptions granted EU steel producers to 261 items worth $295 million.

Mr. Carl says that, as a response to the new U.S. concessions, the EU has, in his words, decided not to pull the trigger for now.

The EU decision not to act is aimed at giving the United States time to review hundreds of requests by European steelmakers for further exemptions of their products from the U.S. tariffs. The United States says it will continue making exemptions through the end of August.

Diplomats in Brussels say some EU member states advocated delaying the decision because they want to avoid a confrontation with the United States. Germany and Sweden have publicly indicated that they are reluctant to get involved in a row with Washington over its steel tariffs.

The Bush administration justified the tariffs as necessary to give the struggling U.S. steel industry time to restructure. The EU has not only challenged the tariffs' legitimacy under World Trade Organization rules but also says they were motivated by Mr. Bush's need to gain voter support in steel-making areas ahead of November's mid-term elections in the United States.

But Europe, too, is demonstrating political awareness. In drawing up its retaliatory list, the EU is targeting items produced in states that are crucial to the Republican election effort, such as citrus juice from Florida.