WASHINGTON — Japan and the United States failed Thursday to narrow their disagreements on the issue of planned U.S. steel import tariffs, raising the possibility of Japan taking the case to the World Trade Organization.

At bilateral talks in Washington, Japan told the U.S. that if the tariffs are imposed, it will reserve all the rights permitted under WTO rules, including retaliatory action, Japanese officials told reporters after the meeting.

The measures being considered by Japan include seeking dispute-settlement procedures and compensation for damage caused by the U.S. measures, they said.

In the talks, Japan maintained that the current situation within the U.S. steel industry does not justify the imposition of the high tariffs, but the U.S. contended its step is consistent with WTO rules.

“We retain all rights under the rules of the World Trade Organization, including retaliatory action. It is needless to say that (the rights include) taking the case to a dispute settlement panel of the WTO,” Economy, Trade and Industry Minister Takeo Hiranuma told a regular news conference in Tokyo.

If the U.S. introduces the tariff on March 20, as it announced, Tokyo will have to make a decision urgently, he said.

At the same time, Hiranuma said Tokyo is ready to continue discussions with the U.S. over the trade dispute, if the U.S. is willing to have another round of consultations.

President George W. Bush announced March 5 that his administration will impose three-year tariffs ranging from 8 percent to 30 percent on an array of steel imports, effective from Wednesday, in a bid to rescue the struggling U.S. steel industry.

WTO rules allow member countries to implement a safeguard mechanism designed to slow imports to allow a specific industry to adjust to heightened competition from foreign supplies.

The officials said Japan argued that the difficulties being faced by the U.S. steel industry have resulted from such factors as overcapacity and costs for pension payments for retired workers, rather than from import surges, the officials said.

While acknowledging the impact of those factors, the U.S. insisted the current situation originated mainly from the rise in steel imports, they said.

The U.S. industry has blamed cheap steel imports for the bankruptcy of more than 30 U.S. steelmakers since 1997.

The officials said the Japanese steel industry has submitted to the U.S. a list of 47 steel products for waiver from the planned tariffs. The U.S. has approved 16 of these for exclusion from the import restriction measures, they said.

Japan’s steel industry plans to ask the U.S. government to increase the scope of products subject to the tariff waiver by taking into account U.S. users of Japanese products, such as automakers and electrical appliance makers.

The U.S. will make a final decision on its waiver list in early July.

Tokyo also demanded that Washington pay compensation to make up for the losses to be incurred by the proposed U.S. action, but Washington responded that the U.S. has no obligation to offer compensation.

WTO rules require a member country launching import curbs to discuss compensation with affected countries.

If the U.S. does not compensate Japan for the curbs on steel products, Japan can retaliate, under certain conditions, by raising tariffs on other products imported from the U.S.

Meanwhile, Tokyo wants to increase exports of steel products that are exempted from the proposed U.S. action. The U.S. plans to exclude steel products that cannot be made in the U.S.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.