Most nations condemn U.S. steel import tariffs; Canada approves

<br>LONDON (AP) _ Steel-producing countries around the world reacted angrily Wednesday to the U.S. decision to impose punitive tariffs on imports, saying the move betrayed years of work toward freer global

Wednesday, March 6th 2002, 12:00 am

By: News On 6

LONDON (AP) _ Steel-producing countries around the world reacted angrily Wednesday to the U.S. decision to impose punitive tariffs on imports, saying the move betrayed years of work toward freer global trade and could spark an all-out trade war.

Britain's trade secretary, Patricia Hewitt, said she and Prime Minister Tony Blair were ``bitterly disappointed.'' In Germany, Economics Minister Werner Mueller said it placed ``a considerable strain'' on U.S.-European relations.

The European Union said it would complain to the World Trade Organization after President Bush slapped tariffs of up to 30 percent on several types of imported steel in an effort to help the ailing U.S. industry.

Japan and South Korea said they were considering a complaint to the WTO, and Chinese Foreign Trade ministry spokesman Gao Yan said the Chinese government expressed ``strong dissatisfaction'' at the decision.

Some countries accused the United States of trying to avoid the painful steel-industry restructuring that other nations have undertaken over the last few years.

``The German steel industry underwent the necessary structural change a few years ago with painful job cuts _ without protective measures,'' said Economics Minister Mueller.

``It is generally known that the problems of the U.S. steel industry are due not to imports, but to decades of missed restructuring and a resulting lack of international competitiveness,'' he added.

Hewitt said the move violated the spirit of negotiations at the World Trade Organization, the international organization that governs global trade.

``We are now embarking on new trade negotiations to try to cut tariffs across the world and it really is shocking that America has taken this action, clearly in defiance of WTO rules,'' Hewitt told British Broadcasting Corp. radio.

Japan's trade minister, Takeo Hiranuma, said the country was considering a complaint with the WTO. His comments echoed those of EU Trade Commissioner Pascal Lamy.

``The U.S. decision to go down the route of protectionism is a major setback for the world trading system,'' Lamy said after Tuesday's decision.

Lamy said the EU would ``set the wheels in motion'' to launch a WTO panel, which would rule on the legality of the tariffs and could authorize retaliatory measures.

Such action could take months. In the meantime, the European Union's executive commission held a trade war council Wednesday to consider ways to protect Europe's fragile steel industry.

Taken together, the 15 EU countries comprise the world's largest steel producer, with 21 percent of world production in 1998, according to the latest EU figures.

The EU fears the new tariffs would jeopardize its nearly 4 million tons of annual exports to the United States, and divert up to 16 tons of cheap steel onto world markets, much of it to Europe.

``It is a serious, serious decision and there is no justification,'' EU Commission President Romano Prodi said going into Wednesday's meeting.

That feeling was echoed across Europe and Asia.

South Korea, the world's No. 6 steel-maker, said it would use ``all possible means'' to fight the U.S. tariffs and would join the European Union in an appeal to the WTO. South Korea exported 14.6 million tons of steel in 2001, of which 2 million tons went to the United States.

However, South Korea's Pohang Iron and Steel Co., the world's largest steel producer, expressed relief after being told that shipments to its U.S. joint-venture firm USS-POSCO Industries would be exempt from the tariffs.

In Moscow, Russia's Foreign Ministry summoned U.S. Ambassador Alexander Vershbow to express concern about threatened U.S. sanctions on Russian steel imports as punishment for alleged dumping.

Australian Trade Minister Mark Vaile and New Zealand Trade Minister Jim Sutton were also critical. Vaile said he may file a WTO complaint, while Sutton said he was looking into further steps, including whether the tariffs were consistent under international law.

Bush's decision drew a similar protest from Brazil, which exported $726 million worth of steel product to the United States last year.

``We have been an indiscriminate and unfair victim of the United States,'' said Jose Alfredo Graca Lima, a top Brazilian trade negotiator.

Canada, whose steel is exempt from the tariffs, welcomed the U.S. decision.

``Our message that restrictions on imports from Canada would significantly disrupt the operation of the integrated North American market was understood and I commend the president for recognizing this and acting on it,'' said International Trade Minister Pierre Pettigrew.