EU stays sanctions as US ends steel duties

European trade officials and steel companies hailed President George W. Bush's decision yesterday to scrap controversial steel import duties, and the EU said it would no longer strike back with retaliatory sanctions.

The European Union had threatened to slap punitive tariffs on around $2.2 billion of US goods if Mr Bush did not rescind a decision to impose the duties in March 2002, a move which sparked a major transatlantic trade dispute.

"This is obviously good news for European steel, good news for European steelmakers, good news for European steelworkers. It's good news for Europe," said Trade Commissioner Pascal Lamy, who led EU threats of sanctions.

"We therefore will freeze our own (retaliatory) measures which would have been implemented as of the 15th of this month."

Mr Lamy told a news conference shortly after the White House announced the scrapping of the duties that the EU would also remove measures launched to protect its own market from a possible influx of steel from third countries, from today.

The World Trade Organisation ruled the tariffs illegal and authorised the EU to impose its retaliatory sanctions.

"I welcome the decision of President Bush to lift the protectionist tariffs on steel imports... as it shows that the US government wants to return to competition and open markets," said German Economy Minister Wolfgang Clement.

French Trade Minister Francois Loos called it "excellent news for our industries". "They will now be able to export normally again to the United States," he said.

In London, Trade Secretary Patricia Hewitt said: "I am delighted. I am very pleased that now, after two years of really solid fighting against them, America has said they will lift them, and lift them completely."

She also praised the European Union's unity in standing against the tariffs.

"We in Europe by standing together, by using the World Trade Organisation and saying we are going to uphold the rules of world trade have played our hand very, very effectively indeed...and we have won," Hewitt said.