Lobbying War Expected Over Extending 1984 Curbs on Foreign-Produced Steel

The new session of Congress signals the beginning of a lobbying war over whether the United States should extend soon-to-expire steel import curbs that have helped the U.S. steel industry become profitable.

The current import ceilings, which were negotiated in the fall of 1984, expire Sept. 30.

Already there has been “a lot of rhetoric” on whether they should be renewed, William Reinsch, steel trade expert for Sen. John Heinz (R-Pa.), said this week.

“In terms of parties coming and sitting down, it’s just now beginning to heat up,” Reinsch said.

Pressured by the steel industry and by Congress, the Reagan administration negotiated 5-year steel trade agreements with Japan, South Korea, the European Community and other leading steel-exporting nations.

The idea was to give American companies breathing space from subsidized foreign competitors by pressuring the competitors to restrict imports on a product-by-product basis.

USX Corp., Bethlehem Steel Corp., LTV Steel Co. and other large steel companies have begun pushing for an extension of the curbs beyond 1989.

But with the steel industry turning a second consecutive profit last year and with some importers complaining of steel product shortages, it is no sure bet that the large firms will win renewal of as strong a package of quotas as those of 1984.

Three days before winning the November election, President Bush pledged to continue the so-called Voluntary Restraint Agreements in some form. But opponents of the plan believe that they can make a case for ending or at least scaling down the import curbs.

Import Reductions

There is little argument that the curbs have aided the steel industry’s revival. Imports have been reduced from 26.4% of the American market in 1984 to about 20.5% last year. Meanwhile, employment and profits of U.S. steel companies were up last year over 1987.

The issue is whether the quota agreements are still necessary, and to what degree, if any, they have harmed sectors of the American economy other than steel companies.

The Precision Metalforming Assn., an industry group, says the availability of steel has been reduced because of the import curbs. The association represents hundreds of metal product manufacturers of such products as brake pedals and computer frames.

“Our position is because of the restrictions on steel supplies--which cause increases in prices and limited availability--we would rather see the most open and competitive steel market possible,” spokesman Greg Estell said Monday.

The steel trade issue has already spawned some angry language.

After Caterpillar Inc. of Peoria, Ill., issued a September, 1988, paper arguing against continued import ceilings, the American Iron and Steel Institute soon compiled a 20-page, point-by-point rebuttal.

In the Jan. 1 rebuttal, the trade association accused Caterpillar of “numerous distortions and inaccuracies.” The paper claimed that the import curbs “do not cause steel price increases or otherwise impede the competitiveness of U.S. manufacturers.”