EU wins battle over US as Bush backs down on steel
RICHARD CARTER
05.12.2003 @ 09:16 CET
The EU claimed a major victory over the US yesterday (4 December) when US President George W Bush announced a withdrawal of American steel tariffs, ending a long-running dispute between the World's two largest trade blocs.
The tariffs were declared illegal by the World Trade Organisation (WTO) in a final ruling last month and the EU was poised to introduce retaliatory tariffs worth over 2 billion euro on politically sensitive goods.
Trading blows. But the EU won the battle (Photo: EU Commission)
But a trade war was averted ahead of the 15 December deadline as the US backed down and the EU immediately removed the threat of retaliation.
It's all about the elections
President Bush's spokesman said in a statement that the decision to remove the tariffs was "based upon my strong belief that American consumers, the American economy is better off with a world that trades freely and a world that trades fairly".
The spokesman added, "the safeguard measures have now achieved their purpose and, as a result of changed circumstances, it is time to lift them".
But most analysts think that the decision was little to do with President Bush's belief in free trade and all to do with winning votes before next year's elections.
The EU's retaliatory measures - tariffs on products ranging from orange juice to motorbikes - were carefully targeted to hit politically sensitive areas.
If the EU threats were carried out for example, the President may have been in danger of losing the crucial orange and lemon growing state of Florida to the opposition Democrats in the November 2004 Presidential elections due to the tariffs threatened against American orange juice.
But on the other hand, President Bush is likely to lose support in steel producing states such as Pennsylvania and Ohio as around one million steelworkers' union members have urged their members to vote against him.
It is thought he weighed up the electoral options and decided that Florida was more important.
Europeans jubilant
Whatever the real reason behind the American climbdown, there was jubilation in Brussels for a Commission that has been bruised recently by defeats from its own Member States on issues such as the euro rules and competition policy.
"Whatever the reasons were, we got the result we wanted", Pascal Lamy, the commissioner responsible for trade, told BBC's Newsnight programme.
Earlier, Mr Lamy had told journalists in Brussels, "This is good news for European steel, good news for European steelmakers, good news for European steelworkers. It's good news for Europe".
Other nations, including Japan and China also dropped their threat of retaliation against the US after Mr Bush's statement.
