US embassy cable - 03THEHAGUE2922

UNCLAS THE HAGUE 002922 
 
SIPDIS 
 
State for EB/BTA/ANA, EUR/ERA, EUR/UBI 
 
Commerce for U/S Aldonas, A/S Lash 
 
USTR for ASTEPHENS/CNOVELLI 
 
TREASURY FOR OASIA 
 
E.O. 12958 N/A 
TAGS: ETRD, NL, WTRO, EUN 
SUBJECT: TRADE MINISTER CALLS IN AMBASSADOR REGARDING U.S. 
STEEL SAFEGUARDS 
 
REF: STATE 312026 
 
1.  SUMMARY: Trade Minister van Gennip called in the 
Ambassador on November 18 to voice very serious concerns at 
the prospect of U.S. steel safeguards remaining in place 
following the WTO Appellate Body confirmation that these 
safeguards are WTO-inconsistent.  She noted that the 
Netherlands would be alert to the possibility of the USG 
replacing the safeguards with other protective measures such 
as revising the method of calculating antidumping and or 
countervailing duties.  Van Gennip said that revising the 
anti-dumping, countervailing duty calculations would 
"constitute a clear breech of U.S. obligations under WTO 
rules."  Should the U.S. replace the steel safeguards with 
other WTO-inconsistent measures or fail to remove the 
safeguards altogether, van Gennip said the Dutch government 
would support the EU taking retaliatory measures.  The 
Ambassador replied that it is both the U.S. and EU interest 
to see retaliation avoided and noted that he could not 
speculate about the timing or nature of any action the 
President might decide to take in regard to lifting, 
modifying, or maintaining the safeguard measures. END 
SUMMARY 
 
2.  TEXT OF 11/18 DEMARCHE BY TRADE MINISTER VAN GENNIP ON 
STEEL 
 
The Netherlands welcomes the ruling by the World Trade 
Organization Appellate Body that U.S. Safeguard measures 
("201 measures") on steel imports are not in compliance with 
WTO rules. 
 
The Netherlands expects the United States to comply with the 
WTO findings by removing these safeguard measures on steel 
imports at short notice, but ultimately five days after the 
decision by the Appellate becomes final. 
 
The Netherlands deems compliance with findings of the WTO to 
be at the core of the multilateral trade system.  The 
further strengthening of that system is in the interest of 
all participating countries.  In the aftermath of the lack 
of success of the 5th Ministerial Meeting of the WTO, it is 
of the utmost importance that the membership of the WTO 
lives up to its commitments.  At the present juncture, such 
compliance is even more important, as the lack of commitment 
may undercut the current effort to revitalize the Doha 
Development Agenda. 
 
In the absence of US compliance with the findings of the 
Appellate Body of the WTO, the parties complaining have the 
right to take appropriate measures. The Netherlands will 
support a decision by the EU to impose retaliatory measures 
if the US Government fails to withdraw the 201-measures on 
steel. 
 
Both the European steel industry and their American clients 
have been seriously hampered by the "201-measures".  Speedy 
withdrawal of these measures is therefor in the interest of 
both the European and American economies. 
 
The Netherlands will remain vigilant as to the possible 
measures: 
 
---The Netherlands has learned that the current practice of 
the US as regards the determination of anti-dumping duties 
on steel imports is being discussed. 
 
---Such a change would lead to deduction of section 201 
and/or countervailing duties from the gross unit price in 
order to determine the applicable export price or 
constructed export price used in anti-dumping calculations. 
Such a practice would be in our view constitute a clear 
breach of US obligation under the WTO rules. 
 
---Moreover, protecting the domestic steel industry through 
such measures will have a devastating impact on our joint 
efforts to reconstruct the steel industry and to create a 
free market for steel products. 
 
Sobel