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. Last Updated: 07/27/2016

20 Nations Slam U.S. for Trade Rule Abuse

GENEVA -- A coalition of 20 countries fighting against hefty new U.S. steel tariffs on Friday labeled the United States a serial abuser of global free trade rules and demanded it cancel the controversial measures.

But officials from the 15-nation European Union, Japan and China, all part of the group, said U.S. representatives had given no sign in two days of talks at the World Trade Organization that the tariffs might be reconsidered.

"If there is no change in their position we will aim to get a WTO disputes panel set up by mid-May," said an EU official. "We are not ready to wait."

In a joint statement after the meeting, the group, which also includes South Korea, Switzerland and Norway, said it told the U.S. team that the "protectionist" tariffs violated global trade accords and would be challenged in the WTO.

"They also voiced their shared concern about the systematic U.S. abuse of safeguards instruments," it added, referring to the WTO's 1994 Safeguards Agreement invoked by President George W. Bush in announcing the tariffs last month.

That pact allows WTO countries, normally bound to keep their markets open, to take measures including imposition of additional duties to limit a surge of imports that threaten the survival of a domestic industry producing the same goods.

Bush and his aides argue that the long-ailing U.S. steel sector is facing just such a threat. But the EU and its allies say there has been no recent increase in U.S. imports and that the industry's troubles are of its own making.

They point to the fact that the United States has so far lost every time other countries have brought cases to the WTO against earlier safeguard measures on other products, and say the steel tariffs are no different.

"They have to be stopped somehow from just pushing on with actions which they know, whatever they say in public, are against the rules," one Asian diplomat said.

The tariffs, in force since March 20, add up to 30 percent in duties to the cost of a wide range of imported steel products, eliminating the competitive edge they have over U.S. equivalents on the vast U.S. domestic market.

U.S. industries using steel have also protested, saying the measures will push up their costs and bring job losses.

The EU, the major victim, says its producers stand to lose around $2.4 billion annually over the tariffs' three-year term, and has drawn up a list of U.S. goods against which it might retaliate from the middle of the year.

Japan, which like the EU interprets the Safeguards Agreement to allow such action if the United States offers no compensation in other areas to keep overall bilateral trade in balance, says it is looking at similar action.

The United States says retaliation without waiting for the outcome of the dispute settlement case in the WTO brought by the anti-tariffs coalition -- a process which could take up to two years -- would violate the rules and create a dangerous situation in the trade body.

Countries in the coalition have also been angered by suggestions from U.S. officials that the outcry over the tariffs would soon die down, and by what they see as U.S. efforts to split them by offering concessions to some.

EU officials say that although Japan and South Korea have questioned the EU decision to set a temporary ceiling on steel imports to prevent the union's market being flooded by products diverted by the U.S. action, the coalition remained firm.

"We think they understand that we didn't want to do this and we all agree that the main effort must be to get the U.S. to withdraw," one said.