May 10, 2000

Washington, DC - The Commerce Department today reacted to the World Trade Organization's Appellate Body ruling against the United States in a dispute involving subsidies provided to a British steel producer. 

"I am extremely disappointed by today's decision of the WTO Appellate Body," said Acting Under Secretary for International Trade Robert S. LaRussa. "Despite this decision, the Administration continues to be fully committed to ensuring that U.S. producers and workers, and their communities, are not injured by unfair trade practices."

This dispute arose out of the Department's countervailing duty order on certain hot-rolled lead and bismuth carbon steel products (leaded steel bar) from the United Kingdom. In its annual reviews of this countervailing duty order, the Department determined that certain subsidies continued to provide benefits even after the producers were privatized. The EC claimed that this approach violates the WTO Subsidies Agreement and brought its case to the WTO. 

On December 23, 1999, a WTO dispute settlement panel agreed with the EC, ruling that because a "fair market value" was paid for the subsidized operations, any past benefits were extinguished. The United States then appealed this decision, arguing again that privatization transactions do not automatically eliminate the benefit from prior subsidies. Today, the WTO Appellate Body disagreed with the United States and upheld the panel's decision.

The Administration is in the process of reviewing this highly technical report.