EU Backing Proposals for Tariffs Against U.S.

European Union foreign ministers backed proposals calling for retaliatory tariffs on U.S. exports due to the tariffs announced by the United States to protect the U.S. steel industry.

The proposed EU tariffs are being developed despite conciliatory moves by the United States to exempt some European steel products. It is estimated that the European imposed sanctions could total $300 million. Some of the U.S. goods that could see tariffs include steel, paper products, textiles, and orange juice.

Spanish Foreign Minister Josep Pique told reporters that there was "unanimous support" for the measures among the 15-nation bloc.

EU Trade Commissioner Pascal Lamy said June 10^th the decision would send a "clear political signal" to Washington that the EU would stand united and not be lured into seeking individual deals.

"We are not upping the ante, but we are showing firmness," Lamy said.

The EU is challenging the Bush administration's imposition of punitive tariffs on imported steel at the World Trade Organization, but is moving to enact measures of its own while the case is heard.

It says the American tariffs are illegal under WTO rules.

WTO rules allow the EU to impose retaliatory measures if no deal for compensation — usually lowering tariffs or raising quotas on other imports by a comparable amount — is reached with the United States.

The EU's executive commission has drawn up two lists of products that could be hit with retaliatory tariffs of up to $888 million.

Yet despite the tough talk, Lamy said efforts to reach an amicable compromise with Washington over steel were "starting to bear fruit." He refused to elaborate.

Lamy said the EU would file the lists at the WTO in Geneva this month, but added EU governments would not decide whether to implement the shorter list, worth $341 million, until mid-July.

Last Friday, the U.S. Commerce Department announced it would exempt 61 products of imported steel from the tariffs and may add more before a July 3 deadline. Some 40 German companies alone have applied for exemptions.

U.S. trade officials admitted that Washington was willing to exempt European steel products from the 30 percent tariffs because certain EU steel products served "niche markets" not served by U.S. steelmakers.

"Some of these exemptions are being asked for by American exporters," said Lamy.

If the WTO rules that the U.S. steel tariffs violate its trade rules, the EU can impose an additional longer list of American imports — this one worth $547 million — that would face European duties.

A decision by the WTO is not expected for another two years. Associated Press