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Renew Steel Import Quotas, Study Says

October 7, 1988

WASHINGTON (AP) _ A new study provides ammunition for companies that want the United States to extend soon-to-expire steel import quotas with the European Community, Japan and other nations, according to one steel-state senator.

The study, released Thursday by three Washington attorneys and economist William Noellert, says conditions that led to negotiation of steel import barriers by the Reagan administration in 1984 - namely, intervention by foreign governments to help their steelmakers compete in world markets - have not changed.

The study will help steel makers convince the public the five-year quotas, which expire in the fall of 1989, should be continued, said Sen. John Heinz, R-Pa.

″The American public will have the facts about the extent to which foreign governments have rigged the world’s steel supply, and about the failure of the U.S. government to do anything about it until the eleventh hour,″ Heinz said.

Noellert and attorneys Thomas Howell, Jesse Krier and Alan Wm. Wolff all work for the Washington firm of Dewey, Ballantine, Bushby, Palmer and Wood. Their research was financed partly by six American steel companies that are on record as favoring continuation of the quotas.

In conjunction with the release of the study, those six companies released their own statement on import ceilings during a press conference Thursday.

″The United States should not dismantle this system until the international distortions which give rise to the policy in the first place have been eliminated,″ said the statement by Armco Inc., Bethlehem Steel Corp., Inland Steel Industries Inc., LTV Steel Co., National Steel Corp., and USX Corp.

Congressional pressure and a finding by the U.S. International Trade Commission that the steel industry was being harmed by imports led the Reagan administration to negotiate five-year import agreements with Japan, South Korea, the European Community and other leading steel exporters in 1984. The agreements placed product-by-product caps on the amount of steel than can be imported into the United States each year.

Since the quotas took effect, the foreign share of the American steel market has dropped from 26.4 percent in 1984 to 21.3 percent in 1987, according to Thursday’s study, called ″Steel and the State.″

The steel industry, which cut its workforce from 500,000 in 1973 to 163,000 in 1987, was profitable last year for the first time since 1981.

Given continuing government subsidies of foreign steel operations, the study said it would be ″imprudent, if not foolhardy, to permit completely open access to the U.S. market...″

The study said that even with the quotas, the United States has permitted a much higher level of steel imports than Japan or Europe would consider acceptable.

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