United States President George W. Bush's decision to curb steel imports is a prime example of hypocrisy at the heart of international trade arrangements, the head of the London-based World Development Movement (WDM) said Wednesday.

The European Union pledged on March 6, 2002 to hit back 'immediately' at the United States through the World Trade Organization (WTO) as steel producers went on a war footing over hefty U.S. tariffs on steel imports. Steel producers from around the globe blasted the decision by President Bush to throw a barricade around the ailing U.S. steel sector, which blames cheap imports for 31 bankruptcies since 1997. This Reuters graphic shows the annual U.S. imports of steel by country. (Reuters Graphic)

Washington's announcement yesterday of up to 30 percent tariffs on some imported steel products sends a clear message, said WDM's director Barry Coates, that "free trade is fine for opening up markets around the world, but please don't try it at home."

The new tariffs--designed to protect the ailing U.S. steel industry over the next three years--are expected to affect imports from China, South Korea, Japan, and the European Union. Plans for their imposition from March 20 prompted widespread media speculation over the prospect of a looming trade war.

Director-designate of Friends of the Earth U.K. Tony Juniper called for retaliation against the US in the form of a European ban on imports of genetically modified food and the imposition of an energy tax on US goods.

However, European Union trade commissioner Pascal Lamy ruled out unilateral retaliation Wednesday and said the 15-nation bloc would work within World Trade Organization (WTO) rules to resolve the matter, a course of action which could take up to two years.

The move towards tighter protection of the United States steel markets captured newspaper headlines because it involved Europe and Japan rather than poorer, more vulnerable countries, according to trade campaigners.

Trade rules force developing countries to open up their economies to products and investment from industrialized countries, said WDM's Coates, but when they try to export their own goods they face heavy import charges or subsidized competition.

WDM cites figures showing that as many as 500,000 farmers in the Philippines are losing corn export income, on which their livelihoods depend, due to heavily-subsidized US corn which undercuts foreign prices on the domestic market.

Trade ministers from the WTO's 142 members, including the US, renewed a long-standing pledge last November, at a summit in Doha, Qatar, to set up a "a fair and market-oriented" global trading system for agricultural products with special attention given to the needs of developing countries during ongoing negotiations.

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