By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- U.S. Trade Representative Robert Zoellick says the United States will not sit back and let its national interests be harmed.

Appearing May 21 at the spring session of the World Economic Forum in Washington to discuss trade issues with his European counterpart European Union (EU) Trade Commissioner Pascal Lamy, Zoellick defended temporary tariffs on steel imports imposed by President Bush in March and the farm bill passed by Congress in May as measures supporting vital U.S. interests. He also reaffirmed the U.S. position that these policies comply with World Trade Organization (WTO) rules.

A number of U.S. trade partners, including the EU, condemned the steel tariffs and the new package of agricultural subsidies included in the farm bill as protectionist measures, and some have challenged, or threatened to challenge, them before the WTO.

But Zoellick suggested that EU complaints had no merit and stemmed to some degree from anti-American feelings. Citing news reports, he noted that it has become fashionable in Europe to bash the United States as a protectionist country.

"Sanctimoniousness is a posture, not a policy," he said.

Zoellick said agriculture subsidies authorized by the farm bill were less on an annual basis than the current government payments to U.S. farmers and less than total EU support for its farmers.

He called the farm bill a good starting point to a comprehensive negotiated WTO agreement on a reduction of agricultural subsidies worldwide.

Zoellick said that the Bush administration is prepared to engage in serious negotiations on this and other issues once Congress passes trade promotion authority (TPA), also known as fast track.

He expressed disappointment that current Senate debate over an omnibus trade bill that includes TPA has failed to generate more attention from free trade supporters.

Zoellick said that he did not believe that the controversial Dayton-Craig amendment to the Senate TPA bill would survive House of Representatives-Senate negotiations. Those negotiations would start once the Senate passed its bill. But if the Dayton-Craig amendment remains part of the final package, Zoellick added, he will recommend that the president veto the package.

Under TPA, Congress restricts itself only to approve or reject a negotiated trade agreement, within strict time limits and without amendments.

Under the Dayton-Craig amendment, those restrictions would not apply to parts of any trade agreement concerning changes to antidumping and other trade remedy laws.

Lamy, who joined the discussion from Brussels via video link, said he believes that the U.S. decisions on steel tariffs and farm policy were motivated by political rather than economic interests. He said that he did not think that the steel tariffs would help the U.S. steel industry to restructure and suggested instead that they were imposed to satisfy powerful groups whose political support was essential for winning TPA.

Lamy said that the EU also considers TPA an important issue and is watching with a great interest the debate on the trade bill in the U.S. Senate.

But if the steel tariffs and new farm subsidies are the price for TPA, he said, the EU is not prepared to pay it.

Lamy agreed that the farm bill might turn out to be an incentive for starting serious negotiations on agricultural subsidies. But he said he wished that the Bush administration had framed the steel tariff issue in a similar way.

Despite continued disagreements over the steel tariffs and farm subsidies, both Zoellick and Lamy rejected the view that U.S. and EU trade policies were on a collision course.

Zoellick pointed out that transatlantic trade relations are generally positive with the U.S. and EU economies increasingly integrated and interdependent.

And Lamy said that the United States and the European Union have common strategic interests, which override current disputes.