WTO nixes 201 - Scrap Industry News - World Trade Organization

Recycling Today, Dec, 2003

The World Trade Organization, in what it calls a final verdict, has ruled that the Section 201 steel import duties enacted by the U.S. violate global trade rules.

The WTO's Appellate Body in mid-November upheld the main thrust of a July decision by a panel of trade judges.

The European Union (EU) and several other countries--including Japan, Brazil, South Korea and Switzerland--filed complaints with the WTO over the duties, introduced in March 2002 to protect the struggling U.S. steel industry.

The U.S. argued that the steel duties, which were initially for up to 30 percent but have been lowered, were needed to protect producers against a flood of cheap imports.

According to news reports, the EU will impose $2.2 billion in sanctions unless Washington withdraws its tariffs in 35 days. Other countries also could join in.

As well as provoking an outcry from Washington's trading partners, the steel industry has been heavily criticized by some groups within the U.S., especially automakers. They claim the move has increased the price of their materials, causing job losses in the industry and making vehicles more expensive for consumers.

The EU is threatening to retaliate by imposing their own surcharges to U.S. exports to the EU five days after the decision is official unless President Bush ends the tariffs. Other U.S. trading partners are expected to announce retaliatory measures as well.

Steelmakers are nonetheless urging President Bush to adhere to his support of the domestic steel industry.

"Section 201 is a critical component of U.S. trade law. Failure to uphold the steel safeguards would have a devastating impact, not only on the steel industry, but on all industries that depend on American trade law," Dan DiMicco, vice chairman, president and CEO of Nucor Corp., Charlotte, N.C., says.