Mar 1, 1984
U.S.-EEC COOL THEIR DISPUTES OVER COMPENSATION FOR STEEL RESTRICTIONS.
GENEVA, FEBRUARY 28 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The United States and the European Economic Community appear to have reached an understanding to "defuse" their dispute on the compensatory retaliatory measures imposed by the EEC over U.S. restrictions on steel imports.-Following the understanding Monday at Brussels, after high-level consultations between the two, the U.S. withdrew in the GATT Council Tuesday its move to get the Council to "disapprove" of the EEC actions.-Last year the U.S.A. had imposed restrictions on steel imports into the U.S.A. from the EEC countries, acting under article XIX of the general agreement.- Thereupon, the EEC exercised its rights under that article to retaliate for "substantially equivalent" amounts by raising the duties on U.S. imports into the EEC on a number of products. This increase in duty is due to go into effect from March 19 1984.- At the January meeting of the Council, the U.S. had complained that the EEC’s retaliatory measures were far in excess of the damage done to the EEC in the curbing of steel imports, and had sought deferral of the EEC retaliation.- Neither the GATT Council nor the EEC agreed to this, and thereupon last week, the U.S.A. had sought a special meeting of the Council to "disapprove" of the EEC action.- There has been no GATT precedent for this, and in any event any disapproval by the Council would have needed EEC agreements and thus not on the cards.-However, on Monday the U.S. and EEC held bilateral talks in Brussels in which William Brock the U.S. Trade Representative and Viscount Davignon, the vice-chairman of the Community took part.-While withdrawing in the Council Tuesday its request for disapproval, the U.S. indicated that the bilateral talks had resulted in the two parties agreeing on the procedures to be used in settling their outstanding differences. The U.S. however reserved its right to return to the Council, though not for "disapproval".- The U.S. told the Council Tuesday that it was not challenging the EEC right to retaliate under article XIX, but was only insisting it should be greater than the original U.S. action.- The U.S. did not indicate the terms of the understanding reached so far.- At the previous meeting, the U.S. had complained that the EEC had estimated it would be imposing duties on 119 million dollars worth of imports, where the U.S. trade statistics (of export values) showed that a much higher quantum of goods would be covered by the in duties.-The U.S. complaint related firstly to the exchange rate used in the EEC calculations (98 European currency units to 100 U.S. dollars), as also the EEC trade statistics of the quantum of goods covered.-The U.S. has not so far publicly given any figure of its own estimation of the value of the goods to be affected by the EEC retaliation.-But at the last Council meeting, the U.S. had said that in respect of one product, "styrene" (a chemical), the EEC import value was put at 36.6 million dollars whereas the U.S. statistics of exports showed it was 66.4 million.-According to other sources, the U.S. and EEC would appear to have agreed in Brussels that the exchange rate to be used should be the current ECU/dollar rate for each year. This would mean for 1984 about 80 ECU’s to 100 dollars.-This is a substantial gain for the U.S.A.-On the other side, the U.S.A. would appear to have agreed that the relevant trade statistics would be the EEC import value figures (as is used in GATT statistics) and not the U.S. export values.- However the two sides are yet to go into detailed trade statistics of the items covered by the EEC retaliatory actions, and these discussions are expected to continue in Brussels.-