Nice, but not a big deal says New Zealand steel exporter

By ELLEN READ

New Zealand's largest steel producer has welcomed President George W. Bush's decision to remove US steel tariffs, but said the import taxes had not had a big effect on it.

"It is good news for the world steel industry but it will have very little material impact on New Zealand Steel," an NZ Steel spokesman said.

When the tariffs were introduced, the company sold steel previously exported to the US in other markets closer to home.

Before the tariffs, New Zealand sent about $60 million of steel to the US, almost all from the BHP-owned NZ Steel mill at Glenbrook.

NZ Steel makes 625,000 tonnes of steel a year, 60 per cent of which is exported - mainly to the Pacific Islands and Australia, although some goes to Europe and the US.

The US imposed tariffs of up to 30 per cent on certain steel imports in March last year, saying it needed to give its ailing domestic industry three years of breathing space after a flood of imports.

Last month a World Trade Organisation panel ruled the tariffs violated global trade agreements and must be removed.

That decision gave countries opposing the tariffs the right to impose retaliatory tariffs until the US lifted the steel tariffs.

The 15-member EU said then it would strike back this month with the first of up to US$2.2 billion of tariffs on US exports including textiles, cigarettes and steel.

The New Zealand Government also had been considering its options.

New Zealand Trade Liberalisation Network executive director Suse Reynolds said the US decision was great news.

"Not only was there no legal basis for it - the US failed to satisfy the criteria required to impose a safeguard measure - but there was no moral basis either," she said.

Reynolds said the tariffs flew in the face of the US's self-proclaimed role as the champion of open world markets and demonstrated how trade barriers harmed international trade and domestic industry.

"The European Union and Japan were threatening a trade war, and US industry relying on competitively priced steel was suffering," she said.

She said Bush's decision demonstrated the value of a system of international trade rules to small nations such as New Zealand.

"There is no way New Zealand could have achieved this on its own without the WTO dispute settlement procedure."