Thursday, 11 March 2004

Questions (21)

Joe Costello

Question:

20 Mr. Costello asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to concerns that a threatened trade war between the EU and the US could considerably raise the cost of raw materials for Irish industry; the steps she intends to take in her capacity as President of the Council of Ministers to seek a solution to the dispute; and if she will make a statement on the matter. [8071/04]

View answer

Written answers (Question to Minister for Enterprise)

The dispute to which the Deputy refers concerns the ruling by the World Trade Organisation, which found the US foreign sales corporation measures to constitute an illegal subsidy. In May 2003, the WTO endorsed the EU request for countermeasures. The EU however, avoided any immediate recourse to countermeasures so as to give a reasonable period of time for the US Administration and Congress to adopt the necessary amending legislation to comply with the WTO ruling. Subsequently, in December 2003, the EU Council unanimously adopted Council regulation No. 2193/2003 which set a deadline for compliance of 1 March 2004.

The EU's objective remains the withdrawal of the US illegal subsidy and in this regard the EU has opted for a measured and gradual response geared towards focusing the minds of the US legislators to implement amending legislation which complies with the WTO ruling. In order to minimise the negative consequences that possible EU countermeasures could cause to EU economic operators, the EU Commission, in preparing the list of products to which sanctions apply, included only products on which dependency from the US was considered low. Thus the product list was confined to imports from the US which represented a maximum 20% of total imports into the EU, and which were also exported from the EU. The product list was finalised following a public consultation process with EU industry.

In Ireland, we implemented our own national consultation process with a wide range of key stakeholders, including with Forfás, IDA Ireland, Enterprise Ireland, and with business interests including IBEC and the chambers of commerce. Many Irish companies applied to the EU Commission successfully to have their products removed from the list. I am satisfied, therefore, that every effort was made to minimise the impact on Irish industry and users of the imposition of these trade sanctions.

The EU stands ready to respond positively should Congress approve legislation which brings the United States into compliance with the WTO rulings. During its Presidency, Ireland will look at opportunities to facilitate discussion at the Council leading to the resolution of this dispute and be ready, in conjunction with other EU Ministers, to consider and enact a new regulation rescinding the countermeasures on the basis of WTO compatible legislation being enacted by the US. I am sure that EU member states and the European Commission fully subscribe to this approach, on which we can work successfully.