Europe, Asia welcome U.S. decision to scrap steel import tariffs
Friday, December 5th 2003, 12:00 am
By: News On 6
TOKYO (AP) _ European and Asian nations welcomed the U.S. decision to scrap tariffs on steel imports, praising the move as staving off the danger of growing protectionism among key trading partners. But global jitters are growing about Washington's simmering trade tensions with China.
Within hours of the announcement from President Bush to drop the import tariffs he imposed last year, first Europe and _ by Friday morning _ Japan said they were dropping their threat to impose retaliatory tariffs on American goods, averting a possible trade war between the allies.
``It's great that the United States has reached this decision,'' chief Japanese government spokesman Yasuo Fukuda said. He said Japan will forego its threat to slap retaliatory tariffs on more than 300 items, including plastics, gasoline and clothing.
Japan's sanctions totaling $85 million would have been Tokyo's first against its closest trading partner since the World Trade Organization was formed in 1995.
In Beijing, a Chinese government official also welcomed the U.S. decision.
``If the United States fulfills its commitment to cancel the protective tariffs, then China will not take retaliatory measures on some imports from the United States,'' said Commerce Ministry spokesman Chong Quan in a statement on the ministry's Web site.
The European Union ended its threat to impose sanctions on $2 billion worth of American exports, calling Bush's decision ``good news for European steel makers.''
Bush's decision to impose steel tariffs last year set off outrage in Japan as well as Europe and South Korea, and was ruled unfair by the World Trade Organization.
Washington had argued that the safeguards on steel imports were necessary to allow the reorganization of an industry that has suffered more than 40 bankruptcies since 1997. On Thursday, Bush said the tariffs were no longer needed because the 21 months they had been in place had given the U.S. industry a chance to consolidate and modernize.
South Korea, which had been considering imposing tariffs and duties on U.S. products, called Bush's decision ``an appropriate measure to promote international free trade and minimize unjust damages to exporters.''
Analysts said the influx of foreign steel into the United States was not expected to grow significantly even without the safeguards because of unrelated factors such as the drop of the U.S. dollar against foreign currencies. A weak dollar tends to make foreign products more expensive in the United States and hurts Asian and European exporters by eroding the value of their U.S. earnings.
The bigger cause for worry is the brewing trade dispute between the United States and China, said JP Morgan chief economist Masaaki Kanno.
U.S.-Chinese trade clashes have been growing over textiles, TVs, steel and soybeans as China's trade surplus with the United States balloons to record levels. But any dips in Chinese trade are likely to hurt Asian economies at a time when many nations, especially Japan, are counting on Chinese growth to keep their own economies going.
``The United States, Europe and Japan have had their share of trade friction in the past so everyone could expect a relatively calm response,'' Kanno said. ``The world is more nervous about any trade disputes with China.''
Japanese steelmakers were more guarded in their praise of Bush's decision than their ministry counterparts, praising it as ``proper,'' given the WTO ruling.