NZ to challenge US steel move

3.50pm

New Zealand is to pursue a legal challenge at the World Trade Organisation against tariffs on imported steel imposed by the United States in March, Trade Negotiations Minister Jim Sutton said today.

The US placed three-year safeguard tariffs of up to 30 per cent on steel imports to protect its industry.

"We don't believe that the imposition of this measure was justified by the relevant World Trade Organisation (WTO) rule that regulates use of safeguard measures," Mr Sutton said in a statement.

New Zealand had talked to the WTO and the US for several months over the issue but had not been convinced the US could justify its move under WTO rules.

"Accordingly, we are now requesting that a WTO dispute settlement panel be established to consider our complaint about the US measure."

New Zealand steel exports to the US last year totalled around $70 million. The extra cost of the 30 per cent tariff put the important trade at risk, Mr Sutton said.

Several other WTO members were also concerned about the US measure, and many of them were already pursuing dispute settlement action against it.

A WTO dispute settlement panel could take until early next year to make a decision on the legality of the US move and an appeal could follow that, he said.

Earlier this week, Commerce Minister Paul Swain and acting customs minister Jim Anderton asked for a system monitoring imports to be set up following fears New Zealand's own steel industry could be endangered by a surge in imported steel diverted from the US.

US tariffs angered major steel exporters including Japan, the European Union (EU) and South Korea, prompting them to come up with their own retaliatory tariffs against US products.

Japan last week put on hold plans to impose 100 per cent tariffs on US$4.88 million ($10.04 million) worth of US steel and steel products from June 18.

EU foreign ministers have delayed a decision on retaliation until at least late July, and possibly October, to give the US more time to tackle their concerns.

- NZPA