The World Trade Organisation (WTO) yesterday agreed to set up a panel to rule on the dispute between the EU and US on the latter's imposition in March of tariffs of up to 30 per cent on steel imports.
Last month the dispute escalated when the EU announced plans to impose retaliatory tariffs on $341 million (€363 million) worth of US imports if it did not get compensation for the US move. The US then counterclaimed against the EU at the WTO in Geneva.
In a statement issued in Brussels, the EU Trade Commissioner, Mr Pascal Lamy, praised the WTO move to set up a panel to rule on the legality of the US position as "an important step forward in our response to the unjustified, highly protectionist US measures."
"I am in no doubt that the United States will lose this case, as it has lost all six previous safeguard cases," he said. "Pending the outcome, the Commission will continue to take all necessary measures to defend European interests, including maintaining pressure on the US to provide an acceptable package of product exclusions and compensation."
The EU says its steel tariffs of up to 26 per cent were meant to prevent a feared flood of cheap imports from countries hit by the US protective measures. EU officials said they were forced to respond in kind to safeguard Europe's own shaky steel industry.
Both sides have 20 days to agree on the composition of the independent three-member dispute panel. If they fail to agree, they can ask the WTO to name the members. The panel may take up to a year to rule and its decision may be appealed although such rulings are usually upheld.
The US claims it is entitled under WTO rules to impose temporary "safeguard" tariffs to protect a struggling industry while it undergoes restructuring.
The EU argues, however, that as a precondition for such special measures the US must be able to demonstrate a surge in imports which Brussels claims Washington cannot do. The EU also claims some of the tariffs are directed at the wrong steel products.
A move by Japan, China, and South Korea also to establish panels was blocked by the US, but is likely to be approved next week - WTO rules allow the use of the veto only once. Switzerland, Norway, New-Zealand, and Brazil are also in dispute with the US on the issue.
