WTO rules U.S. steel duties illegal

EU threatens to step up tariffs after Washington announces plans to appeal

? In a stinging rebuke to the United States, the World Trade Organization ruled Friday that heavy duties on steel imports imposed by the Bush administration violated global trade rules.

Washington said it would appeal, and would keep in place the tariffs that President Bush had justified as necessary to protect domestic steel producers against a flood of cheap imports during a restructuring period.

In response, the European Union stepped up plans to impose $2.2 billion in retaliatory duties on U.S. imports, ranging from footwear to fruit and vegetables — possibly pricing them out of the market.

A three-member panel of trade experts said in a 968-page ruling that the “safeguard” duties of up to 30 percent introduced by the United States last March were out of line with WTO rules. That confirmed an interim ruling issued earlier this year and upheld complaints filed by the European Union, Japan, South Korea, Norway, Switzerland, China, New Zealand and Brazil.

In a joint statement, the eight called on the United States to remove the duties “without delay.”

“It’s a big legal victory for us all, which we now have to transform into an economic victory,” EU trade commissioner Pascal Lamy said.

The WTO panel said the United States failed to prove that its domestic steel industry had been harmed by cheap imports — a precondition for safeguard duties.

It also said the United States acted illegally by excluding imports from countries with which it has free trade agreements — Canada, Mexico, Israel and Jordan.

The Bush administration insisted the tariffs were legal.