March 31, 2017 / 8:15 AM / 5 months ago

Germany urges EU to file WTO complaint against U.S. in steel row

German Foreign Minister Sigmar Gabriel speaks during a news conference with his Greek counterpart Nikos Kotzias (not pictured) following their meeting at the ministry in Athens, Greece, March 23, 2017.Alkis Konstantinidis

BERLIN (Reuters) - Germany urged the European Union on Friday to consider filing a complaint with the World Trade Organisation (WTO) against the United States over its plan to impose duties on imports of steel plate from five EU member states.

U.S. President Donald Trump is expected to sign executive orders on Friday aimed at identifying abuses causing huge U.S. trade deficits. He is also preparing to meet Chinese President Xi next week in Florida, with contentious trade issues likely to be high on the agenda.

Global steel prices have slumped as Chinese producers, who account for about half of the worldwide steel supply, have flooded the export markets, leading to protests and anti-dumping complaints by the United States, the European Union and others.

On Thursday, the U.S. Department of Commerce issued a final finding that European and Asian producers dumped certain carbon and alloy steel cut-to-length plate in the U.S. market, allowing it to impose duties ranging from 3.62 percent to 148 percent.

Among the affected companies are firms in Germany, Austria, Belgium, France and Italy.

Gabriel said the U.S. government seemed prepared to give U.S. firms an "unfair competitive advantage" over European producers even though this violated international trade law.

"We Europeans cannot accept this. The EU must now examine whether it also files a complaint at the WTO. I strongly support this," Gabriel said. The European Commission, the EU's executive arm, is in charge of trade matters in the 28-member bloc.

"The WTO rules are the backbone of the international trade order. To deliberately violate them is a dangerous step," he said. "It is the first time that the U.S. in such a case resorts to distorting practices that do not comply with the WTO rules."

In Brussels, a spokesman for the European Commission said it regretted the U.S. move to impose anti-dumping measures, adding that the duties were "artificially inflated".

"Our comments and notably those concerning the use by the U.S. of methodologies which artificially inflate the preliminary dumping margins have not been given expected consideration," the spokesman said.

The final duties were in many cases higher than the preliminary duties set in November. "We will look now into the detail of the decision taken by the U.S. and consider the appropriate steps," he said.

THREAT

Gabriel said Germany had to stand up to the U.S. and fight "accounting tricks" that put Germany's internationally competitive steel industry at a disadvantage.

"If the U.S. got through with unfair competition, other industries would also be subject to the same threat," Gabriel warned.

Economy Minister Brigitte Zypries said Germany would, along with the European Commission, continue to campaign for Washington to stick to WTO rules.

"The signals the U.S. is sending in the steel sector really worry us," Zypries said, adding that she would raise the issue when she visits the United States in May.

Cut-to-length steel is used in a wide range of applications, including buildings and bridgework; agricultural, construction and mining equipment; machine parts and tooling; ships, rail cars, tankers and barges; and large-diameter pipes.

The U.S. Department of Commerce's finding is the result of a petition from Nucor Corp (NUE.N) and U.S. subsidiaries of ArcelorMittal SA ISPA.AS and SSAB AB (SSABa.ST).

For Austrian producers and exporters, dumping duties on the Voestalpine group (VOES.VI) and all others were set at 53.72 percent. Among French manufacturers and exporters, duty rates were set at 148.02 percent for Industeel France and 8.62 percent for Dillinger France and all others.

In Germany, duties were set at 5.38 percent for AG der Dillinger Hüttenwerke, 22.90 percent for the Salzgitter group (SZGG.DE) and 21.03 percent for all other exporters and producers.

The chief executive of Italian steel firm Marcegaglia said the U.S. risked setting off a trade war if it implemented its plans for a border tax, an issue that should be taken to the WTO.

"And when you start a war you don't know where you will end up," Emma Marcegaglia told reporters in Rome.

Marcegaglia said it was still possible that the issue could be resolved through trans-Atlantic negotiations.

Italy's industry minister warned that a U.S.-EU trade dispute would hurt growth and global governance at a time when the West needs to show a unified front against unfair trade practices.

"Any trade clash between the United States and Europe would be dangerous not only for our economies, but also for the rules that govern globalisation," Carlo Calenda told reporters.

Reporting by Michael Nienaber in Berlin; Additional reporting by Gernot Heller in Berlin, Philip Blenkinsop in Brussels and Antonella Cinelli in Rome; Editing by Hugh Lawson

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