COMMENT

by MONITOR
THE tariffs which the American government imposed on steel imports last year have been ruled illegal by the World Trade Organisation (WTO). In its judgement the WTO said the tariffs, ranging from 8 to 30 per cent, broke global trading rules and it rejected all the US arguments in defence of the measures. Washington said that it disagreed with the decision and would appeal against it. The ruling was unusually unambiguous and the European Union countries and Japan, who jointly took the case to the WTO, were understandably delighted with the outcome, describing it as a “total victory”. Also pleased with the outcome were American car manufacturers who complain that they cannot compete in the world market-place when they have to pay a high price for steel from US producers. When President Bush imposed the three-year tariffs at short notice in March 2002 it was widely thought that he had done so to protect decaying steel plants in cities where he was electorally vulnerable. More recently, the US Administration has been considering whether to extend the initial period for a further two years. In anticipation, the EU had drawn up a list of American goods on which it would impose tariffs if the WTO decision had gone against it - fruit and vegetables and shoes and textiles worth around ?3 billion in taxes among them. The US steel tariff issue is only one of a number which pit the EU against the United States. Next up may be the EU's Common Agricultural Policy over which, despite promised reforms, it may be vulnerable.