US STEEL ACTIONS COULD COMPLICATE URUGUAY ROUND TALKS

Feb 29, 1993

US STEEL ACTIONS COULD COMPLICATE URUGUAY ROUND TALKS

Geneva 29 Jan (Chakravarthi Raghavan) -- The US action this week, imposing provisional counter-vailing duties on steel imports from some 19 countries, while not directly related to the Uruguay Round negotiations and hopes of its resumption, could complicate the talks and make some compromises difficult, according to some GATT participants.

While the US hopes, as one official has indicated, that the actions would lead to agreement on a Multilateral Steel Agreement in the off-again-on-again talks at the GATT and the Uruguay Round, it is also likely to harden the stance of those opposing the US call (made in December-January Dunkel consultations) for some basic changes in the Dunkel text of the Draft Final Act on anti-dumping rules and thus block a consensus either way on the rules.

The US demands for change in antidumping rules would preclude any GATT panel, after the Uruguay Round, from going into the facts and evidence in any dumping dispute to make its judgement whether or not there had been dumping, and also preclude whether the GATT rules and obligations had been observed.

It would make these determinations and interpretations of evidence by the US investigators beyond challenge, and thus make the dispute settlement mechanism meaningless and the trading system even less credible than now.

Given that US authorities have found in favour of US complaints in over 90 percent of cases initiated thus far, it would ensure 'more of the same' in the future, and result in trade insecurity harassment for competitive exporters to the US market, and secure 'managed trade'.

The US action on steel has also a bearing on the Uruguay Round market access negotiations and the US demand for zero-to-zero tariff cuts in steel sector -- talks that have been stalled because of its being tied up with the negotiations for the multilateral steel agreement and the US demand (under Bush) that not only future subsidies, but past subsidies should be covered.

The US actions has angered exporters and exporting countries in Europe and Asia and Latin America, many of whom are planning to take the issue to the General Agreement for settlement of the disputes.

This would involve bilateral formal consultations with the US in the GATT, and failing that, going before the Tokyo Round Committee on anti-dumping and counter-vailing duty rules, for referring the disputes to a panel. However, even if they succeed, under the present procedures, adoption of panel reports need consensus of all the participants.

In what is seen as an attempt by the Clinton administration to lower tensions, before it has made up its mind on the range of trade policy issues and problems left by the Bush administration, including the Uruguay Round negotiations, US Commerce Secretary, Ron Brown, sought to distance himself and the administration from the levies by underlining that the actions were "policy statements, (but) mandated procedures and are the result of exhaustive investigations".

Though the cases had been initiated by the US steel industry under the US trade laws during the Bush administration, and Brown has distanced himself, a deputy assistant USTR, Joseph Papovich, was quoted Thursday by the US Mission bulletin (which was reporting on the levies) as saying that the dumping and subsidy cases have exerted pressure on US trade partners to complete a multilateral steel agreement (MSA) and that "a lot of foreigners are real unhappy, but they perceive the need for an MSA".

And on Thursday, after the outcry against that action, the new USTR Micky Kantor, has been quoted as saying that the way to solve these problems (about dumping duties) was for "foreign governments to halt subsidies and foreign producers to halt dumping".