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WASHINGTON: The European Union's top trade negotiator has promised retaliatory sanctions if the United States does not life steel tariffs and repeal longstanding export subsidies by the end of the year.
The uncompromising language of EU Trade Commissioner Pascal Lamy came on Tuesday after the conclusion of two days of tough talks with officials from the administration of US President George Bush and key legislators. It raised the prospects of a politically and economically painful trade war in the middle of a US presidential campaign. And it seemed to have left the Republican-controlled Congress and White House with an unsavoury choice -- take action now that could harm the vulnerable steel industry and other manufacturers or risk sanctions that could prove even more uncomfortable closer to the election next year. "If the US does not move, retaliation is a certainty," Mr Lamy said in a speech before the European Institute, a research group devoted to transatlantic issues. At issue are two separate disputes, steel and export subsidies. On Monday, the World Trade Organisation is scheduled to issue its final ruling against steep tariffs that Mr Bush imposed on imported steel in March. Mr Lamy said the EU would then give Mr Bush five days to life the tariffs or faced the |
imposition of up to $3.1 billion in retaliatory tariffs by December 15 on selected US exports.
The WTO already has ruled US export subsidies illegal and Mr Lamy reiterated his pledge to impose up to $5.7 billion in retaliatory tariffs on 1866 products by March if Congress did not repeal the subsidies this year. "The feeling on Capitol Hill is that it can be done," Mr Lamy said. "My message is: Do it." The Senate finance committee and the House ways and means committee have approved corporate tax cuts that include a repeal of the subsidies. But divisions remain among Republicans, especially over the House version. The prospects for a quick passage of either Bill seem dim. US Trade Representative Robert Zoellick played down the threats, saying that Mr Lamy understood that Washington was taking Europe's concerns seriously and was making strenuous efforts to address them. "His primary interest is not to impose sanctions but to bring the US into compliance," Mr Zoellick said. Mr Lamy insisted on Tuesday that the broad transatlantic trade relationship would remain cordial even if the EU hit back on the steel and export-subsidy issues. -- WASHINGTON POST |
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