Member countries of the World Trade Organization (WTO) today agreed to create a neutral panel to rule on whether controversial U.S. steel tariffs violate international trading agreements.
The panel was requested by the European Union (EU), which says the tariffs in force since March are illegal – a charge the United States denies – and will cost steel producers in the 15-nation group up to $4 billion a year in lost trade.
Japan, South Korea and China also are asking for panels, but have made clear they will merge their cases with that of the EU.
The United States blocked creation of a panel at a meeting of the WTO's Dispute Settlement Body May 22, but according to the WTO’s dispute regulations the U.S. could not do so a second time, and the decision to set up the panel was accepted without debate.
Members of the three-person panel are likely to be chosen within the next month and will have six months to decide on the matter. However, either side can appeal the panel’s decision. A further hearing and other procedures could mean a final ruling could be delayed until late next year.
The EU argues that the tariffs, which can be as high as 30 percent, on a range of steel products violate a range of WTO pacts, including the Safeguards Agreement invoked by President Bush when he announced them in early March.
Brussels and Tokyo contend that the agreement allows them to impose retaliatory tariffs on other U.S. goods unless Washington offers compensation for their losses on steel sales to the U.S.