- The Washington Times - Thursday, July 27, 2000

The Clinton administration yesterday released its long-awaited plan to combat rapid increases in steel imports, which the U.S. industry and its union charge were responsible for enormous job losses in 1998.

The Commerce Department, which helps administer the laws that guard against the predatory "dumping" of products in the United States, promised to closely monitor steel-import levels and crack down on foreign producers that sell their products in the country at below their cost of production.

"This report sets out a comprehensive strategy to eliminate practices that distort global steel trade and is designed to avoid a future steel-trade crisis," said newly installed Commerce Secretary Norman Mineta.

The plan caps a two-year administration effort to respond to what U.S. companies and the United Steelworkers of America have labeled the "steel crisis" of 1998, in which imports surged, domestic production fell and workers were laid off.

The report concludes that the effects of the Asian crisis, combined with foreign government policies, unleashed a flood of unfairly priced exports to the United States that cost American companies dearly.

U.S. companies initially won protection from imports through Commerce and the International Trade Commission in 1998. But efforts by the steel industry to obtain U.S. government help peaked last year when Congress declined to pass legislation that would have imposed quotas on steel imports.

From the start, the Clinton administration and the domestic industry held foreign producers responsible for their woes, a charge that those companies and their allies in the United States have always disputed.

"This report continues the unfortunate legacy of blaming the U.S. industry's problems on other people," said Dave Phelps, president of the American Institute for International Steel, an organization that represents importers and exporters of steel.

His group and foreign producers long have charged that the U.S. steel industry's failure to adopt modern production technologies is the source of its problems.

The administration developed the plan under heavy pressure from the United Steelworkers union, a key Democratic constituency whose relationship with the White House has been strained to the breaking point over President Clinton's support for the China trade legislation that passed the House in May.

George Becker, the union's president, made clear yesterday that he would seek additional measures to support the domestic industry but stopped short of calling for outright limits on steel imports.

"The administration and Congress must now apply the facts laid out in this report to concrete programs that safeguard American jobs," Mr. Becker said.

The genesis of the U.S. steel industry's problems, according to the report, was the economic crisis that began in Thailand in mid-1997 and spread to Malaysia, Indonesia, the Philippines and Korea, and eventually Brazil and Russia. Companies from these countries then sold to the United States surplus production for which there was no domestic demand.

As rising imports sent prices into a tailspin, the U.S. industry laid off thousands of steel workers, while another 10,000 faced reduced work weeks, lower-paying jobs or early retirement, the report said.

But the report charges that foreign government policies, not only macroeconomic factors, caused the problems faced by the domestic industry. The report dwells at length on policies in Japan, Korea and Brazil such as toleration of steel cartels that have led to overproduction and dumping in the U.S. market at abnormally low prices.

Foreign producers and the importers who benefit from lower prices argued that the prices reflected the crisis-ridden world economy rather than any conspiracy to drive U.S. producers out of business.

"These were macroeconomic factors affecting every internationally traded product," Mr. Phelps said. "Why should steel be any different?"

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