Advertisement

European Countries Agree to Cut Steel Exports to U.S.

Times Staff Writer

The European Community agreed Friday to curtail its steel shipments to the United States, but the beleaguered American industry said it fears that other producing nations will step up their efforts to capture a growing share of the U.S. market.

Under the agreement, steel imports from the European Community will be limited to 5.5% of U.S. consumption for the four years beginning in 1986. The 10 nations of the European Community have captured 6.6% of the U.S. market so far this year, even though a trade pact in effect through the end of this year places a 5.4% ceiling on the European share.

U.S. Special Trade Representative Clayton K. Yeutter, without addressing whether the Europeans would live up to the new agreement, called it “a major accomplishment for the President’s steel program, as well as a major step forward for trade relations between the U.S. and the EC.” He said that the Administration remains “firmly committed” to restraining foreign steelmakers’ share of the U.S. market.

But the American Iron and Steel Institute complained that the new agreement fails to punish the European Community “for its persistent violations of the arrangement over the past two years.”

Advertisement

Donald H. Trautlein, chairman of both Bethlehem Steel Corp. and the Iron and Steel Institute, pointed out that the steel imports from all countries “took an intolerable 30% of the U.S. market in September. It is obvious that action must be taken by year’s end to include other significant steel-supplying countries for which no arrangements exist.”

The Reagan Administration announced in September, 1984, that it planned to hold imports from all countries to 18.5% of domestic steel consumption. The United States has reached arrangements with 14 nations, including Japan, as well as the European Community, to restrain imports.

But other nations among the world’s 50 steel exporters are rushing to fill the void, and foreign steel captured about 25% of the U.S. market during the first three quarters of the year. Canada, Austria and China, among others, have been expanding their sales here.

Like Plugging a Dike

Advertisement

“The Europeans and Japanese will be very upset if Third World countries take their place in selling to the U.S., and then they will be clamoring to get the restraints lifted,” said a domestic steel industry official who asked not to be identified. “It’s like trying to plug a crumbling dike, with one leak after another.”

The new agreement with the Europeans, unlike the one now in place, will cover high-priced specialty products, such as stainless steel used in aerospace and communications equipment. Specialty steel shipments from Europe quadrupled in September and a spokesman for the Specialty Industry of the United States, a 14-company coalition of specialty steel producers, said: “The industry is in a state of shock.”

The new agreement, which was reached after round-the-clock bargaining in Brussels, came a day after Yeutter had warned that the United States might halt imports of some European steel products in the absence of a new trade pact.

Easing of Tensions Seen

Advertisement

Administration officials said that the compromise should dispel some of the heightening economic tensions between the United States and its European trading partners. The United States, after failing to persuade the Europeans to lower their barriers to American citrus products, Thursday announced a sharply increased tariff on pasta, an important European export (Details in Business).

Every million tons of imported steel cost the domestic producers $500 million in revenues and 3,500 jobs, according to industry estimates. Imports from the European Community totaled 5.4 million tons in the first nine months of this year, up from 4.4 million tons a year ago, and imports from all countries were about 20 million tons during that period.


Advertisement
Advertisement