Yanking the princely plank

On Monday, the World Trade Organisation ruled that the US steel tariffs imposed on certain steel products imported into that country in March 2002 have indeed infringed WTO rules. Dave Wilson looks at the implications.

If something happens and five different people tell you about it separately, it’s like they are describing five different things because each one sees it completely from their own subjective experience. They don’t really see what is happening. – Tenzin Palmo. <br>

On Monday, the World Trade Organisation’s (WTO) Appellate Body ruled that the US steel tariffs imposed on certain steel products imported into that country in March 2002 have indeed infringed WTO rules.

The response from the UK steel industry was, of course, one of unprecedented joy. ‘There is no further avenue of appeal open to the US, and we call on President Bush to honour his international obligations and end the tariffs immediately,’ demanded Ian Rodgers, the Director of UK Steel.

And what if he doesn’t? Well, the European Union already has in place a Regulation that means that if that were to be the case, then the EU will impose equivalent tariffs on billions of Euros worth of US goods with effect from early December this year. Possibly on such vital consumer items as Harley Davidson motor cycles or Hummer recreational vehicles!

Of course, the American Iron and Steel Institute (AISI) sees things differently.

‘The US should not buckle under pressure from the European Union,’ said Daniel DiMicco, the chairman of the AISI.

AISI believes that President Bush’s decision to impose steel tariffs has already enabled America’s steel industry to invest billions of dollars to consolidate, restructure and improve its productivity and global competitiveness.

But the steel work in the US is only half completed. And the US steel industry still needs the ‘continued stability’ of the promised ‘relief period’ in which the tariffs are imposed to complete its consolidation process and fully restructure.

So what will the Americans do? Comply with the WTO decision or let their steel industries collapse?

Rodgers believes that the US Department of Commerce is proposing a third way forward – to make technical changes in the way that anti-dumping duties are calculated. That would mean that even if the tariffs were withdrawn today, they would continue to ‘bite’ on many imported steel products for another two to three years. And get the US out of the messy political hole.

‘It looks to us like the US is preparing to ‘cheat’ on its obligations. We are urging the (European) Commission and the British Government that if this proposal is enacted, then the EU must still proceed with retaliation even if the tariffs are withdrawn,’ Rodgers said.

Frankly, this retaliatory talk does seem a little harsh on our dear cousins on the other side of the pond. After all, what Government hasn’t interpreted a law rather more liberally than it should have done when it found that to abide by it to the letter would antagonise a princely section of the community?

On the legal front, at least, perhaps we should take the majestic steel plank out of our own eye before we take it out on the yanks.