WASHINGTON, May 20 (UPI) -- Tension across the two sides of the Atlantic is mounting ahead of the June 18 deadline, as European nations prepare to retaliate against U.S. steel tariffs. But criticism against U.S. protectionist measures is not limited to steel, nor is Europe alone in voicing its opposition.
While opposition against the Bush administration's decision in March to slap on up to 30 percent in tariffs on imported steel and steel products has so far been the focus of the trade spat between the two economic giants, probes into anti-trust practices could soon be flaring up.
Last week, European competition commissioner Mario Monti instigated an investigation into the allegedly anti-competitive practices in the sale of ink cartridges, accusing some manufacturers of forcing consumers to buy their own-brand cartridges, rather than cheaper ones manufactured by competing companies.
"This is probably a case here for us...this is a very important market for consumers," Monti said at a news conference in Brussels.
While the EU has shied away from singling out companies such as California-based Hewlett-Packard Co. per se, an EU spokesman based in Washington suggested that the latest dispute over cartridges would not be helped by continued tension over U.S. trade protectionist measures.
"The preferred solution is the removal of the measures," Helin said. "But...compensation would also be acceptable, with the U.S. granting better access for other products from the EU."
The EU has denied that it would seek improved European access to the printer cartridge market in exchange for conceding to U.S. tariffs in the steel sector. Rather, the European bloc continues to hold that if the United States does not back off from the steel levies, it would either seek concessions "in appropriate sectors" such as apparel and food products or indeed retaliate with counter-tariffs.
But a senior U.S. Commerce Department official told UPI on condition of anonymity that the United States could retaliate against European tariffs by increasing trade barriers against the Europeans should they decide to ahead with the retaliatory measures come June 18.
Moreover, tension between the two sides would be further exacerbated should the EU decide to go ahead with the probe on U.S. printer and cartridge manufacturers.
Last summer, for instance, the EU vehemently objected to the merger of U.S. Airways with United Airlines, two ailing airline companies, on grounds of anticompetitive practices and the deal ultimately fell through. The two carriers still continue to struggle financially, and U.S. Airways in particular is seen on the verge of bankruptcy.
Meanwhile, the EU also opposed the potential merger of American Airlines with British Airways on the same grounds.
"To be sure, the airlines dispute didn't win the EU any allies in the airline industry," the Commerce Department official said.
Yet the list of EU frustrations with U.S. trade practices is only growing longer, and more important, more countries are siding with the Europeans.
Japan, for instance, joined the EU last week in protesting against the U.S. decision to levy tariffs on U.S. steel imports by 100 percent as early as June 18 unless the Bush administration lifted its own levies.
"We are obviously not the only ones disappointed with the United States," said Petros Sourmelis, the EU's trade counselor to the United States. He noted that this was the first time Japan was taking retaliatory action against U.S. trade policy, despite the two countries going through numerous trade disputes.
Sourmelis also pointed out that China, South Korea, Switzerland, Norway, and several other countries as well as Japan sided with the EU, protesting that the U.S. tariffs violated free trade policies as outlined by the World Trade Organization.
Moreover, the EU trade counselor added that the farm bill signed by President Bush last week to subsidize wheat and other grain-growers will have a negative impact on Europe's relations with the world's biggest economy.
"The legislation will only lead to overproduction, and protect farmers from the reality of the markets...and going in the wrong direction" as the global community pushes forward to promote freer trade across the world, the EU's Helin cautioned.
Indeed, the International Monetary Fund and the World Bank, as well as other global agencies, have been highly critical of the U.S. move to protect its own farmers at the cost of food producers in other parts of the world. Developing nations have been particularly scathing of the protectionist measure, arguing that what poorer countries need is not more financial assistance, but equal access to global markets which would be prevented by the latest farm bill.
Meanwhile, Canadians have their own gripe against the Bush administration's trade policies, as the government approved the move in March to slap on up to 30 percent in tariffs on Canadian softwood lumber, which has already proven to post a heavy toil on Canada's lumber industry.
Yet, EU officials vehemently denied that the growing list of European and indeed world disgruntlement against U.S. trade policies will mount to a trade war.
"There are a series of trade issues, what we call trade irritants, not just for Europe, but in the global picture," Helin said. But he added that such strains "will not jeopardize the whole relation between the United States and Europe."
He did, however, point out that the U.S. protectionist measures were largely driven by political considerations ahead of November's mid-term elections, yet the people who would pay the highest price for the anti-global policies would be consumers worldwide.
Trade policies by the Bush administration by and large "have been steps in the wrong direction" which will only increase costs and lessen efficiency in global markets, Helin added.
