[A-List] Japan/US rivalry: steel

[Sabri Oncu <soncu@xxxxxxxxxxx>]

Japan threatens US with retaliation on steel
By Ken Hijino in Tokyo and Guy de Jonquières in London
Financial Times
Published: April 25 2002 21:29 | Last Updated: April 26 2002
14:04


Japan said on Thursday it would impose tariffs of $5m (£3.5m) on
US steel products in retaliation against US duties on steel
imports unless Washington withdrew its measures or offered
compensation for trade lost by mid-May.

The move follows last week's European Commission proposal to
raise by E377m ($337m, £232m) tariffs on US exports, including
steel, citrus and rice, in an effort to get Washington to back
down in the escalating international trade dispute.

Although Japan's threatened measures are much more limited, they
are likely to increase tensions with Washington, which says early
retaliation would violate World Trade Organisation rules.
However, the EU and Japan insist they are legally entitled to
retaliate before the WTO decides on challenges they have brought
against the US decision to increase its steel tariffs by up to 30
per cent. Final rulings are not expected for at least another
year.

"If they don't agree to compensation we are entitled to
rebalancing counter-measures," said Hidehiro Konno, vice-minister
of international affairs at the Ministry of Economy, Trade, and
Industry. We believe the most natural area [for counter-measures]
is steel. As our steel exports are being restricted, we will put
higher duties on steel imports from the US. This is not an
ill-intended action of belligerence. The purpose of our action is
to protect the WTO - it is an obligation of a member to make sure
WTO rules are observed."

Tokyo says the US measures have inflicted as much as $138m worth
of damage on its steel industry. It demands compensation in the
form of lower US barriers on other exports.

Japan's $5m of threatened tariffs correspond to the extra duties
the US wil l impose on its exports of flat-sheet steel plates.
Tokyo says the US duties are illegal because American imports of
these products have fallen sharply in recent years.

Negotiations will continue when Takeo Hiranuma, Japan's trade
minister, visits Washington next week. Japan is required to
submit to the WTO by May 17 a list of US products on which it
plans sanctions.


Full at:
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Q
1KL2H0D&live=true&tagid=IXLMS1QTICC&subheading=global%20economy