- The Washington Times - Tuesday, October 23, 2001

A government trade panel yesterday ruled that foreign steel is damaging the domestic industry, paving the way for import curbs early next year if the Bush administration concurs.

The International Trade Commission, an independent body, found that imports have hammered markets for products that account for 79 percent of all the steel produced in the United States.

The ruling was a major victory for steel companies and their union, the United Steelworkers of America. Steel-industry leaders have pleaded with the White House since the Clinton administration for import cutbacks, and now appear closer than ever to achieving their goal.

"We think that the vote is an overwhelming vindication of everything we've been saying for the past four years," Steelworkers President Leo Gerard said.

Opponents of the trade curbs conceded this round.

"It's a big victory for the domestic industry," said Russell Smith, a lawyer with Wilkie, Farr and Gallagher, a firm that represents many Japanese companies who export to the United States.

Hundreds of steel products from the flat-rolled steel used for car bodies and appliances, to piping and tubing, to unfinished steel slabs that are shaped into consumer goods now face new trade barriers, which would likely raise prices for consumers.

Dave Phelps, president of the American Institute for International Steel, which represents steel importers, said the restrictions will have "serious repercussions" for the world economy.

Yesterday's decision stems from a Bush administration June 6 that it would ask the trade commission to determine whether imports are harming the U.S. industry.

Now, after the trade commission makes recommendations on import restraints, President Bush will have until Feb. 19 to decide what mix of tariffs and quotas he wants on foreign steel.

That step could prove to be the toughest hurdle for the steel industry in the wake of the Sept. 11 terrorist attacks in New York and Washington. The Bush administration needs the support of steel-producing countries in the new war on terrorism. Import curbs could affect Britain, Germany, France, Russia, Ukraine, Brazil and Korea, among other new anti-terror allies.

"Now, we're saying to them: 'We want you to help us, just don't ship us any steel,'" said Charles Bradford, an industry analyst with Bradford and Associates in New York.

Mr. Gerard said that the White House remains "very supportive" of the import curbs.

The White House began the trade case after the companies and unions, along with a number of well-connected lobbyists pressed their case with the White House.

The industry has long blamed imports for their woes, though industry analysts say high labor costs and the strong dollar are more likely culprits.

The Steelworkers are particularly strong in Pennsylvania, a state Mr. Bush lost narrowly in the 2000 election, and in Ohio, which he won. Republicans prevailed in West Virginia largely on a promise by Vice President Richard B. Cheney to crack down on imports.

Yesterday's announcement capped a quarter of miserable financial reports for major steel companies over the past month.

Bethlehem Steel, a stalwart of the metals industry for nearly 100 years, filed for bankruptcy last week, one of 25 steel firms who are in, or emerging from, Chapter 11.

The major integrated steel producers such as Bethlehem, who make steel from iron ore and coke, are all hemorrhaging money.

A single major U.S. steel company, Nucor Corp. of Charlotte, N.C., is profitable.

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