Vol. 550 No. 5
6 Mr. Boylan asked the Tánaiste and Minister for Enterprise, Trade and Employment the consequences of the imposition of United States tariffs on steel imports for the European Union; and if she will make a statement on the matter. [9372/02]
On 6 March 2002, the US Administration announced its decision to impose new restrictions on imports of certain steel products into the United States. The application of section 201 – safeguard measures – on these steel products, by way of an additional tariffs on some products of up to 30%, will enter into force on 20 March and will last for three years, with some lessening of the tariff increases in the second and third years.
The European Commission regards these measures as incompatible with US obligations under World Trade Organisation rules and has initiated appropriate action under the WTO process. In addition, the European Commission and EU member states are currently considering the possibility of other actions in response to the US announcement. In particular, the adoption of measures to address the possibility of sudden significant increases in imports into the EU following the imposition of increased US tariffs, is being considered. Following these deliberations, the final scope and nature of the measures to be taken by the EU will in large part determine the impact and outcome of this issue.
Ireland considers it vitally important that every effort must continue to be made to resolve this matter through consultation. We also consider it essential that any action contemplated by the EU be fully in conformity with WTO rules.
The Minister for Finance, Deputy McCreevy, has stated that we do not want anything to start that would limit possibilities for trade and has warned that even a small row would be of concern to the Irish economy. Does that statement imply that, from an Irish perspective, nothing will happen in this regard? Following the ISPAT situation, the Irish steel industry is past tense and the Government had to pick up the tab in the aftermath. I understand that that company made a generous donation to the British Government for its general election campaign. In the context of the world trade talks, does the Minister of State agree it is most extraordinary that President Bush could act in total disregard of reciprocal trade between the US and Europe? Why is this tariff for three years rather than three months? In relation to the statement by the Mini ster for Finance, Deputy McCreevy, is our economy really in such a bad state that even a small row would damage it?
As the Deputy has recognised, Ireland is not a steel producing country but rather a user. In a European context, the countries most affected would be Germany, the UK and France, which have large steel industries. In taking this action, I presume Mr. Bush has an eye to the congressional elections at the end of the year. The whole basis of the WTO is that it is a rules-based organisation. The EU has set its strategy in place and has made various proposals. One such proposal is the idea of a safeguard measure to ensure there will not be a flood of steel imports into the EU, which has to protect its own position. There is very specific structure in place for us to use in this context and the whole process will take some time.
How long?
It could possibly take 18 months to two years to resolve.
As an exporting nation, is it not a matter of great concern that President Bush could take similar action on other products? In the aftermath of 11 September, he has not shown tremendous goodwill towards Europe, having regard to the huge support which the US received in that regard. Having picked on steel as an electioneering factor to enhance his chances in the November elections, with such major implications for European trade, is it not possible he may pick some other product range which would involve similar repercussions?
I share the Deputy's concern at the action which the US has taken. This is a worrying time for the European steel industry. We will certainly keep in touch with our own agencies and have already done so through IDA Ireland and Enterprise Ireland. In a domestic context, we are not hugely concerned from a short-term point of view but, as members of the European Union, we are quite clearly concerned. The Deputy is right in his criticism of the US action.
In terms of our national economy, can the Minister of State confirm that the tariff only refers to raw or unprocessed steel rather than steel products that may be produced here?
I can confirm that. Enterprise Ireland has given an assessment with regard to our indigenous industries, that the imposition of the US tariff is likely to have a limited negative impact on indigenous Irish manufacturing companies.
