On July 11, 2003, a WTO panel confirmed its preliminary judgment in March that the duties President Bush imposed on steel imports a year after taking office violate global trade rules. The Bush Administration had defended the tariffs as the kind of "safeguard" measure allowed by WTO rules for the temporary protection of a domestic industry hurt by unforeseen developments. When the White House authorized the tariffs, critics of the decision said they flew in the face of the president's wider advocacy of free trade. The White House blamed the Russian and Asian financial crises and the dollar's strength at the time, among other reasons. But the WTO panel said the US failed to demonstrate how these events led to a sudden flood of imports, a showing that is the key requirement for such safeguards. The panel also ruled illegal the exemption Washington made for steel imports from Canada, Mexico, Israel and Jordan. While parties to the suit included Japan, South Korea, China and Brazil, the loudest complaints came from the European Union. EU officials were quick to label the tariffs as a political move by the president to win the support of key steel-producing states, such as Pennsylvania, Ohio and West Virginia. Bush Administration officials vowed to appeal the decision. The higher tariffs will remain in effect during the appeal process. This process takes about four months and should be decided in early November. The EU's top trade official Pascal Lamy predicted that Washington would lose the appeal and have to drop the contested steel duties or face EU retaliatory sanctions. The EU has already prepared sanctions worth $2.2 billion if the US loses the appeal but refuses to lift the duties. The retaliation list deliberately targets products made in states that President Bush cannot afford to lose if he wants to be re-elected in 2004, including Florida and Pennsylvania. This WTO panel report is the public version of an earlier confidential report that detailed how the import tariffs violated global trading rules.
 American Wire Producers Association |
