WTO calls for calm in steel tariff row

The World Trade Organisation (WTO) has called on the European Union and the United States to remain calm in their dispute over Washington's imposition of steep tariffs on steel imports.

The WTO's spokesman, Mr Keith Rockwell, made the call in Brussels yesterday after the WTO confirmed that the US action was in breach of international trade rules.

Describing the EU and the US as "the engine of this organisation since the dawn of international trade", Mr Rockwell said that the trade row should not derail the Doha Round of trade negotiations, which stalled in a failed summit in Cancun in September.

The EU has said it will take retaliatory action against the US, imposing tariffs on up to €6 billion of American imports, if Washington does not lower its steel tariffs by next month.

A number of Asian countries yesterday joined the EU in demanding the removal of the US tariffs following the WTO ruling.

The US said it has yet to decide what to do in response to the WTO decision, which was condemned by US trade negotiators and steel unions.

Washington imposed the tariffs last year to protect America's ailing steel industry. They have boosted the price of some imported steel in the US by 30 per cent.

Mr Leo W Gerard, international president of the United Steelworkers of America, said that the tariffs should remain.

"The decision undoubtedly confronts Mr Bush with a test of wills.

"Will he exercise his sovereign right as president to protect the jobs and survival of the entire American steel industry, or will he knuckle under to the threat of economic blackmail being levelled by the European Union?" he said.

The EU will put pressure on the US president by targeting for sanctions products produced in swing states that Mr Bush needs to win in next year's presidential election. Italy's trade minister, Mr Adolfo Urso, urged Mr Bush to remove the steel tariffs immediately in order to avert a damaging trade war.

"As frank and loyal friends of the United States, we hope that Washington will remove as soon as possible the steel tariffs that are considered illegal by the WTO. We want to ward off a commercial war that, for its size, would be unprecedented," he said.