By Luis Cordova

Caracas, 23 June (IPS) - The actions taken in the United States against steel from Argentina, Brazil and Venezuela herald a new wave of trade frictions which could be leveled against oil in the future, SELA said today.

The Latin American Economic System (SELA) warned that once again the invoking of trade regulation mechanisms could become a "relevant source of friction" with the United States, because of its protectionist manoeuvres against the region.

"Trade regulation laws are a constant source of dispute in the trade relations between the United States and the Latin American and Caribbean countries," stressed an analysis made by this organization, which has its headquarters in Caracas.

The main trade regulation instruments in the U.S. are the anti-dumping actions because of unfair competition in prices and those of compensatory rights which are aimed at government practices.

On 2 June, eight U.S. steel companies and the sector’s labour union introduced anti-dumping actions against cold laminated steel from Argentina, Brazil and Venezuela, in addition to nine other countries.

At the same time, Brazil and Venezuela and another two countries were denounced because of countervailing duties.

"The presentation of these five requests against South American steel perhaps indicates that these laws will be used again to restrict access to the U.S. market," the organization said in the last edition of its "SELA’s Antenna in the United States" Bulletin, a quarterly publication which analyzes relations between Washington and the Latin American and Caribbean countries.

The SELA publication warned that "the steel industry’s petitions may encourage other U.S. producers to take action" and specified the case of oil. "On 10 May, the United States Independent Petroleum Association voted in favour of preparing anti-dumping requests against crude oil from Mexico and Venezuela", among other countries.

The governments of the two Latin American countries have called the action unusual, and claim the accusation is based on an alleged participation in a manoeuvre to lower oil prices, which seriously affected their economies in 1998.

These new cases contrast with a clearly downward trend in this kind of complaint in the U.S. during recent years, according to the U.S. Department of Commerce figures quoted by SELA.

Between 1990 and 1994, there were 273 trade regulation complaints in the U.S., whereas from 1995 to 1998, complaints filed against trade partners throughout the world amounted to only 86 cases.

SELA believes this decrease was caused by the end of the Uruguay Round of global trade negotiations, which produced the World Trade Organization, as well as the solid results of the U.S. economy.

But the increase in the U.S. trade deficit and the economic problems confronting some sectors due to factors such as the Asian crisis, could promote a resurgence of this type of demand.

According to figures compiled by SELA, 19 per cent of the actions presented between 1980 and 1998 were taken against Latin America and the Caribbean. Between 1995 and 1998, 14 per cent of these actions were taken against industries of this region.

In 1998, only six of the 47 trade regulation petitions targeted Latin American and Caribbean countries. And the five petitions filed against steel are the first to have been presented in 1999.

The figures given by SELA reveal that 44.2 per cent of the petitions filed since 1980 ended in regulation sanctions, but warned that even if they are not successful they involve costs, trade concessions or market disturbances.

On the other hand, it stressed the fact that steel is the object of this wave of regulation requests. In fact, 41.9 per cent of the demands presented in two decades have been related to the iron and steel industries.

"The trade regulation laws, especially the anti-dumping law, are closely related to the iron and steel industry," SELA said.

And it warned that a draft law before the U.S. Congress even considers imposing "strict limits on iron and steel imports".

http://www.sela.org
sela@sela.org
   SELA,  Permanent Secretariat
Torre Europa, Fourth floor, Urb. Campo Alegre, Av Francisco de Miranda,
Caracas 1060- Venezuela
Tlf: (58) (212) 955.71.11 Fax: (58) (212) 951.52.92