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. Last Updated: 07/27/2016

WTO Begins Probe Into U.S. Steel Tariffs

GENEVA -- The World Trade Organization on Monday launched a probe to decide by the end of this year whether hefty tariffs on steel imports imposed by the United States violate international trade agreements.

Countries in the 144-member body approved creation of a three-person expert panel -- requested by the European Union but backed by several countries, including Japan and China -- at a meeting of the WTO's Dispute Settlement Body, or DSB.

The United States, which insists the measures imposed in March are in line with WTO rules and says it will defend its case vigorously, blocked a first request from the EU at a DSB meeting May 22.

But under the trade watchdog's dispute regulations, it could not do so a second time, and Monday's decision to set up the panel was automatic.

"This is an important step forward in our response to the unjustified, highly protectionist U.S. measures," said European Union Trade Commissioner Pascal Lamy.

"Similar requests by other countries for panels will shortly be accepted as the rest of the world joins to press the United States to remove [the tariffs]," he said in a statement issued in Brussels.

The steel dispute -- which has set the United States against most other producer countries -- has stoked accusations that the administration of U.S. President George W. Bush is pursuing a unilateralist course to serve his own domestic political aims.

Those charges have been intensified with Bush's approval of a farm bill pumping huge new subsidies into U.S. agro-businesses active on global markets, with a U.S. refusal to commit to new targets aimed at reducing global warming and others on promoting world sustainable development.

There are also fears that the disputes over steel and farm subsidies could torpedo the drive for a further round of trade liberalization, which WTO members agreed to launch at a ministerial meeting last November.

Members of the WTO panel are likely to be selected within the next month and under DSB regulations would normally have up to six months to hand down a ruling.

However, selection of the panel could be delayed as a significant number of countries are also bringing similar complaints, complicating the choice of the three trade jurists.

China, in its first use of the WTO complaints machinery since joining the world trade body at the start of the year, will make its first request for a similar panel on June 7.

Japan and South Korea already have requests pending.

When it is handed down, the panel's ruling can be challenged by either side, moving the case to the WTO's quasi-judicial Appellate Body.

Appeals hearings and other procedures would mean that it could be late next year before there is a final decision.

The EU and several other countries, including Brazil, Norway and Switzerland, argue that the tariffs of up to 30 percent on a wide range of steel products contravene WTO pacts, including the Safeguards Agreement invoked by Bush in announcing them in early March.