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EC tries to contain steel row

Michael Harrison,Sarah Lambert
Thursday 28 January 1993 19:02 EST
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EUROPEAN Community and US officials yesterday struggled to play down the threat to world trade posed by the US anti-dumping duties on steel imports.

Amid fears that the action could herald a hard-line protectionist stance by the Clinton administration, condemnation of the US action poured in from governments and steel makers around the world.

But the EC maintained the move was not a harbinger of a new era of American protectionism. In an apparent attempt to leave the way open to peaceful negotiation, a spokesman for Sir Leon Brittan, EC commissioner for external economic affairs, said the US action, though 'unwarranted and wholly disproportionate', did not represent a change to a more 'protectionist ideology'.

He said the Commission took at face value the US Commerce Department's explanation that it had followed mandated legal procedures which gave it no option but to implement the dumping duties.

However, Richard Needham, the British trade minister, took a more belligerent line over the US measures, which affect dollars 2.6bn worth of imports from 19 countries and will force British Steel to pay 109 per cent duty on steel exports.

Asked if he feared a 'protectionist chill wind', Mr Needham replied: 'I do. I think what's happened in America on steel is outrageous. The real point now is to get the message clearly across to the US that this sort of protectionism is not acceptable.'

Mr Needham went on to warn that if the US's behaviour continued it would not 'augur well for the future of the world trading system'.

Pierre Beregovoy, the French Prime Minister, also warned that US protectionsim would provoke EC retaliation.

However, Sir Leon said he hoped it was 'merely an unfortunate spill-over from the past', adding: 'I am looking for a far more co-operative approach from the new US administration.' He has pledged to take the issue up with Mickey Kantor, the new US trade representative, when the two hold a scheduled meeting in Washington on 11 February.

Eurofer, representing Europe's biggest steel producers, said the US Commerce Department had responded to a protectionist offensive from the American iron and steel industry, and the German Steel Industry Association called on the Bonn government and the EC 'firmly to oppose the American protectionists'. Similar protests came from steel makers elsewhere in Europe as well as Japan and South Korea.

Sir Leon will report on Tuesday to a meeting of EC foreign ministers. Brazil, which is also affected, intends to raise the issue at the next meeting of the General Agreement on Tariffs and Trade on 9 December.

Leading article, page 18

(Photograph omitted)

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