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Steel Industry Faces Hurdles

January 12, 1999

WASHINGTON (AP) _ Disappointed at President Clinton’s refusal to take stronger action to block cheap steel imports, the president of the largest steelworkers union says he’ll look for help in Congress.

Lawmakers from steel-producing states stand ready to aid a union that contributed more than $1 million to congressional campaigns since 1997. But even the most ardent supporters acknowledge that success will be difficult and may come too late to be useful.

Mindful of the growing political pressure, Commerce Secretary William Daley and U.S. Trade Representative Charlene Barshefsky held what both described as blunt talks today with Japanese Trade Minister Kaoru Yosano. The U.S. officials emphasizes that the administration will not hesitate on its threat to impose quotas on Japanese steel exports into the United States unless those shipments show a quick decline this year following a surge of more than 400 percent in 1998.

Describing the talks as ``very frank and quite blunt,″ Barshefsky told reporters afterward, ``It is not secret that trade tensions between the United States and Japan are increasing quite dramatically.″

For his part, Yosano told reporters at a separate briefing that he repeated forecasts by Japanese steel companies that based on market conditions they expect their shipments to the United States this year to drop back to the levels in existence before the Asian crisis hit.

However, he stressed that did not constitute a commitment on the part of the government of Japan to pressure its domestic industry.

Sen. Rick Santorum, R-Pa., a conservative with a large labor constituency, said that ``trade is a very controversial subject in Congress. ... There’s the left that would like to see quotas, the middle that would like to see a more reasonable piece of legislation and the right who want nothing.″

Sen. Jay Rockefeller of West Virginia, the Democratic chairman of the Senate steel caucus, said lawmakers from the 16 states that produce steel are not numerous enough to overcome a propensity toward free-trade policies.

``You have to assume that any getting-tougher-on-trade legislation in the Republican Congress is going to have a hard time,″ said Rockefeller, who had considered the White House his last bastion of hope.

On Thursday, Clinton released his plan for combating the tide of steel imports into the United States in the wake of the Asian economic crisis. Domestic steel producers and union leaders immediately derided the plan as inadequate to avert additional plant closures and layoffs.

Industry officials say the surge in imports, which reached record levels in 1998, has already resulted in at least 10,000 layoffs and a handful of company bankruptcies.

George Becker, the president of the United Steelworkers of America, said in a letter Friday to Clinton that the union now has ``no choice but to work with our supporters in Congress ... to pass into law the absolutely vital relief which the administration is apparently unwilling to provide.″

The union specifically wants quotas to restrict imports to pre-crisis levels. Other legislation in the works would ban imports for up to a year, clarify courts’ ability to issue injunctive relief, give the industry a share of the tariffs collected from imports and ease standards for proving harm and winning cases.

Twelve steel producers and two unions already have filed trade complaints accusing Japan, Russia and Brazil of illegally dumping steel in the United States at prices dramatically below production costs.

But because rulings are not expected until the summer, the domestic industry has been pressing the Clinton administration to take more immediate action, including reviews that could lead to quotas or broad tariffs.

But passage of any legislation generally takes months or years, if ever. And then it would have to have the president’s signature.

``I think there’s going to be an awful lot of noise made, but ultimately we’re part of a world trading system,″ said David Phelps, executive director for the American Institute for International Steel, which represents steel importers and exporters. ``Cooler heads in the end will prevail.″

Trent Duffy, a spokesman for the House Ways and Means Committee, said the release of Clinton’s plan actually diminishes the chances for passing legislation.

``The president has just said he wouldn’t support those protectionist types of measures that some might be seeking,″ Duffy said.

Clinton did offer more moderate proposals, including $300 million in tax breaks for steel producers.

The House in October passed a non-binding resolution calling for a one-year ban on imports from some countries. House members hope to build on that overwhelming majority with binding legislation, but they face obstacles from the House leadership and the administration.

Paul Marcone, chief of staff to Rep. Jim Traficant, D-Ohio, said members of the House steel caucus are considering ways to tie up House proceedings until a vote on steel legislation is allowed.

Although such a measure faces a Clinton veto, Marcone said, it would at least serve to pressure administration officials, particularly Vice President Al Gore as the 2000 presidential campaign approaches.

Hank Barnette, chairman and chief executive of Bethlehem Steel Corp., said steel producers and unions are likely to step up their educational campaign aimed at pressuring the administration and Congress. The coalition has already spent several million dollars on ads, rallies and other publicity.

``We must carry the message of our industry,″ Barnette said. ``We want to put the facts right on the record so that any objective person will conclude that we need help.″

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