O'neill opens his mouth again

["Ian Murray" <seamus2001@xxxxxxxxx>]

O'Neill Offers Reassurance on Steel Tariffs, Oil
By Glenn Somerville

PARIS (Reuters) - U.S. Treasury Secretary Paul O'Neill said Wednesday the
"shrillness" of the reaction to the U.S. steel import tariffs would soon
pass and that global economic recovery will not be threatened so long as
oil prices stay in their current range.

Last month the U.S. said it would impose tariffs of up to 30 percent on a
wide range of steel imports for a period of three years to protect its
struggling domestic industry.

"I made note of the fact that right now something of the order of 1,000
requests of exemptions (to tariffs) are being looked at and I think as
some of these exemption requests are processed that the shrillness of
this conversation will be reduced," O'Neill told reporters after meetings
with France's Finance Minister Laurent Fabius and with officials of the
Organization for Economic Co-operation and Development.

He said U.S. trade rules had obliged President Bush to impose the tariffs
on steel imports amid a global steelmaking overcapacity that was damaging
to U.S. producers.

"The world will get through this," O'Neill said.

O'Neill said there was a global glut of steelmaking capacity and said
that "hopefully there will be a substantial reduction in the 30 or 35
percent overcapacity that exists in the world and that we can go on to
another subject."

OIL OPTIMISM

Both O'Neill and Fabius struck an optimistic note about oil prices, which
have risen about $7 dollars a barrel since early March to about $27 on
Middle East tensions.

O'Neill said that since Saudi Arabia, the biggest world oil producer, was
offering to make up any shortfalls in production, costlier energy should
not derail a global recovery.

"It seems to me that the Saudis and the rest of the oil producing
community are together on maintaining their stand of a band of prices and
doing (ensuring) whatever production it takes to stay in that band,"
O'Neill said.

"It's an issue we can proceed with, an assumption that things are going
to be OK.," O'Neill added.

In a television interview after his meeting with O'Neill, Fabius said as
long as oil prices were stable the economic outlook remained positive.

"I'm pretty optimistic provided that the price of oil is not too high,"
the French finance minister said on CNBC television.

G7 WARY ON OIL PRICES

The global economy is recovering from a downturn that set in early last
year, leaving it vulnerable to an oil price shock.

O'Neill and other finance minister from the Group of Seven industrial
nations, who meet in Washington on April 20, have been playing down the
risk of such a shock to a recovery.

The G7 comprises the United States, Britain, Canada, France, Germany,
Italy and Japan.

O'Neill is spending the week in Europe. He met German Finance Minister
Hans Eichel in Berlin Tuesday, Fabius on Wednesday and will head to
London Thursday for meetings with Gordon Brown, Chancellor of the
Exchequer, and others.

O'Neill's European agenda includes discussions on how to tighten
restraints on the flow of funds through the world banking system to
groups that sponsor terror.

In response to questions Wednesday, he conceded that such groups were
"clever" and that it was forcing governments around the world to find new
ways to outwit them.

U.S. officials have indicated they want Europe to take more initiative in
identifying and naming individuals or groups suspected of being agents of
terror but O'Neill has avoided saying publicly what exactly he wants
Europeans to do.

He insisted Wednesday there was no doubt that government actions so far
to thwart the movement of funds have been disruptive to terror groups but
added: "We're a long way from complete on this."

The U.S. Treasury has put 192 individuals, businesses and groups on
suspect lists so far and frozen about $104 million in suspected terror
assets in 150 countries. Of that total, about $35 million has been frozen
by European countries.

(Paris Newsroom +33 1 42 21 5339)