Resolution of the ECSC Consultative Committee on the decision by the President of the United States to introduce measures to protect the US steel industry (adopted unanimously at the 360th session of 10 April 2002)
Date: 2002-04-10
Institutions: Consultative Committee of the European Coal and Steel Community
Subjects: United States, iron and steel industry, market protection, president of an institution, protectionism, trade restriction

C 128/2

EN

Official Journal of the European Communities

30.5.2002

RESOLUTION OF THE ECSC CONSULTATIVE COMMITTEE

on the decision by the President of the United States to introduce measures to protect the US
steel industry

(adopted unanimously at the 360th session of 10 April 2002)

(2002/C 128/02)

The Consultative Committee discussed and assessed the US
President's decision to impose customs duties of up to 30 %
to protect the US steel industry.

The Consultative Committee does not contest any country's
right under
to
protect its domestic industries if the criteria laid down in the
WTO are met.

the WTO Agreement

to adopt measures

The Consultative Committee shares the view of the President of
the United States of America that:

— the US iron and steel
to make

restructured
competitive,

industry urgently needs to be
internationally
it

viable

and

— exceptionally,

these

restructuring measures

should be

backed by regional and social aid programmes,

— the worldwide overcapacities in iron and steel producing
plants urgently need to be permanently reduced, on the
basis of common rules,
lasting
disruption of the international markets.

to prevent

in order

There should, however, as a matter of a principle, be no direct
or indirect national aid to iron and steel producing companies,
since such measures run counter to the principle of
fair
competition — the cornerstone of free world trade. National
measures of this kind only serve to prop up unprofitable,
inefficient and uncompetitive capacities.

The Consultative Committee is convinced that the measures
adopted by the United States President are inappropriate for
achieving these goals, and fears that unilateral measures of this
kind will, for a long time to come, disrupt and hamper a policy
of multilateral, reliable agreements under the OECD and the
WTO.

The Consultative Committee, whilst recognising that the US
industry is faced with economic, social and
iron and steel
regional problems,
they are
caused by imports of steel products from third countries.
Last year alone, the volume of imports into the United States
fell by more than 23 %. In view of this, it is doubtful that there

firmly contests the claim that

are sufficient grounds for taking measures under Article 201 of
the US Trade Act. The Consultative Committee considers that
the main reasons for the current problems of the US steel
industry lie in the fact that in recent years the process of
adapting capacities and technologies has not been carried
in the
through to the full, as it has been,
Community. Other
the burdens placed on
companies by the cost of shutdowns and of pension and
sickness insurance schemes for present and former workers.
The Consultative Committee does not regard the measures
that have just been adopted as a suitable means for actually
dealing with these causes.

for example,

reasons

are

The Consultative Committee sees a risk that, as a result of the
measures just announced by the President, steel which can no
longer be sold in the USA will flood the rest of the world
market and cause lasting disruption to international
trade
relations. Thus the behaviour of the USA means that the inter-
national community must bear the consequences of the USA's
failure to restructure its steel industry.

The Consultative Committee draws attention to its experience
in industrial restructuring in the Community,
including its
experience in capacity reduction, technological modernisation
and corporate restructuring. The fullest possible account was
taken of the interests of the workers and the affected regions in
terms of social security and development prospects. Whenever
the process required State aid, it was provided by means of an
open, transparent procedure agreed between the Member States
of the Community, companies, workers' representatives, dealers
and consumers. Yet during this period other
suppliers
continued, under multilateral agreements, to have access to
the European market for iron and steel products.

The Consultative Committee fails to see any need to protect US
industry by customs duties during this process. It is more likely
that such protectionist measures will slow down or even
obstruct the necessary adaptation processes.

The Consultative Committee
sees unilateral protectionist
measures of the kind announced by the US President as an
obstacle to the creation of multilateral agreements to reduce
worldwide overcapacities. The Consultative Committee fears in
this connection that countries which use State aid to maintain
uncompetitive and unprofitable capacities will continue to do
so, encouraged by the United States' policy. The conduct of the
United States
is particularly harmful with regard to the
countries applying to accede to the Community.

30.5.2002

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Official Journal of the European Communities

C 128/3

to the proposal by Mr Lamy, Member of

The Consultative Committee expresses its profound dismay that
the decision by the President of the United States of America
totally fails to take account of the offers made both in the
context of the OECD and on the part of the Community to
reduce capacities, despite the fact that the binding, verifiable
and lasting worldwide reduction of steel producing capacities is
precisely the declared political goal of the President. This also
applies
the
Commission, to set up a fund to meet the costs of shut-downs
and the costs for workers' pensions and health care. The
Consultative Committee
in
considers
conjunction with the abovementioned internationally agreed
capacity reductions,
for
dealing with crises, since it tackles the actual causes of crisis
takes account of workers'
through multilateral agreements,
social interests, and opens up possibilities for regional devel-
opment without giving rise to international trade conflicts.

is a more appropriate instrument

this proposal,

that

Conclusions

1. The Consultative Committee supports the Commission's
policy of verifying whether the measures adopted by the
US President comply with WTO rules.

protective measures,

2. The Consultative Committee supports the Commission's
including measures
temporary
the
restricting imports, which are intended to protect
European market against
the US
President's decision, without the Commission's resorting to
itself, without hampering inter-
protectionist measures
threatening the
national market
security of
in the
European market.

supply and traditional

relations, and without

the consequences of

trade flows

3. The Consultative Committee supports the Commission in
seeking, through multilateral negotiations in the WTO and
the OECD, to reach a speedy arrangement with the United
States which will remove any further need for this US
decision and will resolve the current serious trade conflict.

4. The Consultative Committee calls on the Commission to
monitor the trends in imports into the Member States in
terms of both volume and price, to observe the impact on
Community producers and on employment, and to report
its findings to the Consultative Committee.

5. The Consultative Committee reiterates its expectations of
the Commission, as expressed at its 342nd plenary session
on 23 October 1998, and considers that the US President's
decisions on steel imports bear out the need for such expec-
tations.

6. The Consultative Committee calls for the acceleration and
pursuance of the international negotiations being conducted
within the WTO and the OECD, with a view to achieving a
lasting and verifiable reduction of overcapacities worldwide.
The declared willingness of the OECD member countries to
reduce such production capacities by approximately 117
million tonnes for the period 1998 to 2005, and that of
the Community to reduce its capacities by approximately
6-8 million tonnes for finished steel products between 2003
and 2005, afford a sound basis for achieving this objective.
In the light of the Consultative Committee's experience in
restructuring and modernising the European steel industry,
the two sides of
in these
negotiations; this adaptation process should comply with
the burdens which undeniably arise
the principle that
should be shared fairly between nations, businesses and
workers;
the
OECD should be accompanied by an institutionalised
information and consultation process. Preference should
be given to using instruments such as those that were
developed and successfully applied under the ECSC Treaty,
and agreements should be concluded under international
conventions in order to create fair conditions for inter-
national
industry.
Agreement on binding environmental and social standards
is a major step in this direction.

this worldwide adaptation process under

industry should take part

competition in the

iron and steel