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CNN Live At Daybreak

E.U. Expected to Recommend Whether Brussels Should Retaliate for Washington's Tariffs on Steel Imports

Aired July 19, 2002 - 05:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: And now we turn our attention now to international trade disputes between Washington and the European Commission. Basically in a nutshell the E.U. is expected to recommend today whether Brussels should retaliate for Washington's tariffs on steel imports.

Let's go to Robin Oakley, who is in Brussels, to explain all of this to us and why we should all be paying attention to this story -- Robin.

ROBIN OAKLEY, CNN CORRESPONDENT: Well, Catherine, there's a lot of anger in the European Union over the levies, the tariffs imposed on steel imports in the U.S. since March by President Bush. The European Union countries say that $2.3 billion worth of their exports are affected by this action and they are angry because they've gone through a painful restructuring of their own steel industries and they say George Bush should be doing that in America rather than penalizing their exports to America.

So what they've got to decide, really, they're content that the World Trade Organization is eventually going to find the U.S. in breach on this and bigger actions would follow. The question is whether they impose some levies on U.S. exports to the European Union in the short-term. They're talking about doing so on $379 million worth of U.S. exports and the 15 E.U. ambassadors have to decide today whether they're going to step up the whole dispute by hitting back, retaliating against the U.S. in that form -- Catherine.

CALLAWAY: Robin, is the recommendation expected to be made today or is this a discussion that could continue for a while?

OAKLEY: No, the recommendation is expected to be made today. In a sense, deadlines have slipped on both sides because the United States has started listing some exemptions for particular E.U. steel products and firms over recent months and has now extended the deadline and said it will go on considering requests for exemption until the end of August.

And meanwhile the European Union has delayed hitting back. It was originally going to do so last month. And really the question today for the United -- for the European Union is to decide whether the United States is playing for time, saying look, there are going to be more exemptions, or whether by holding off action today they can actually win some meaningful exemptions for E.U. firms.

CALLAWAY: Right.

OAKLEY: So far they're saying that the exemptions announced by the U.S. only amount to 10 percent of the exports that go from the E.U. to the U.S. -- Catherine.

CALLAWAY: So there's still some, I guess, talk, some negotiating still going on then a bit?

OAKLEY: Oh, yes. Both sides, I think, are in a mood now to try and de-escalate this situation because, of course, they're all looking at those falling stock markets worldwide and they really don't want to get involved in a tit for tat trade war.

CALLAWAY: Right.

OAKLEY: And the U.S. has threatened that if the E.U. now goes ahead with retaliation, then the U.S. would hit back, as well -- Catherine.

CALLAWAY: It will be interesting to see how all this plays out.

Robin Oakley, thanks for straightening it out for us and telling us why we should be paying attention to this story. Thank you.

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