European trade officials are praising the end of U.S. tariffs on steel imports as a victory for free trade and say the decision has strengthened the watchdog role of the World Trade Organization. The offcials say they are relieved a trans-Atlantic trade war has been averted.
The widely expected decision by President Bush to rescind U.S. tariffs on imported steel has removed a big source of friction between Washington and its European trade partners.
The European Union was poised later this month to impose sanctions on $2.2 billion worth of U.S. exports if the measures were not scrapped.
The EU, which handles trade matters for its 15 members, decided to levy sanctions on U.S. goods after the World Trade Organization's appellate body ruled in favor of complaints by the EU, Japan and six other countries that the U.S. tariffs violated world trade rules.
Washington had justified the duties, imposed in March of last year, calling them safeguards that would give the U.S. steel industry time to restructure.
EU trade commissioner Pascal Lamy told reporters he is delighted with the U.S. decision to eliminate the tariffs.
"We wanted these safeguards to be removed," he said. "They've been scrapped. And it's good news for the European steel industry, good news for European steel workers. Our steel exports to the U.S. - and we have a very competitive steel industry - will be able to resume, and that is the good news."
Mr. Lamy says Europe will now drop its threat to impose retaliatory sanctions.
Although the White House did not mention pressure from Europe as a reason for scrapping the tariffs, Mr. Lamy asserted that it was the threat of European sanctions that motivated the U.S. decision.
Mr. Lamy and his aides, knowing that Mr. Bush faces a re-election battle next year, had singled out for retaliation products made in U.S. states such as Florida and Michigan that are vital to the president's political fortunes.
Individual European countries also reacted favorably to the U.S. decision. Britain said it means there will not be a trade war between the United States and Europe. France says it shows Washington respects the authority of the World Trade Organization.
Eurofer, the European steel industry association, said European access to U.S. markets will become normal again. But Guy Dolle, who heads Arcelor, one of Europe's biggest steel companies, complained that his company had lost $300 million in U.S. sales as a result of the tariffs and will need a year to rebuild its market share. Mr. Dolle, referring to President Bush, says you do not praise somebody for stopping at a red light.