Envoy to Back Renewal of Steel Import Quotas : Also Seeks Global Talks on Government Subsidies

New U.S. Trade Representative Carla A. Hills reiterated Tuesday that the Bush Administration will support a renewal of current U.S. steel import quotas but said she will first attempt to persuade other countries to cut their steel subsidies.

In her first interview with reporters since taking office, Hills also indicated that she is moving to resolve the U.S. dispute with a European Community rule prohibiting the use of growth hormones in beef imported into community nations. However, she gave no details of any new U.S. proposals.

And, as she did during her recent confirmation hearings, Hills hinted that she may be more flexible than trade negotiators in the last Administration in efforts to work out a compromise with the Europeans on the broader issue of how rapidly to reduce global farm subsidies.

Global Talks Sought

Hills’ reassertion that the Bush Administration will support a renewal of the steel quotas came as the steel industry prepared to launch a formal campaign to persuade Congress to extend the system of global import quotas that were imposed in 1984 and will expire Sept. 30.

Rep. John P. Murtha (D-Pa.) and members of the House and Senate steel caucuses, which include members of steel producing states, plan to introduce legislation today to continue the quotas for five more years, despite protests from steel users.

President Bush, in a letter written to Sen. John Heinz (R-Pa.) during the presidential election campaign last summer, already has pledged to support a continuation of the steel quotas, though he hinted--as Hills said Tuesday--that he would seek global talks first.

However, most trade analysts said they hold little hope that such talks will get off the ground soon. The other steel producing countries agreed to put restraints on their exports only after the United States threatened to impose quotas unilaterally.

Steel users complained that the quotas exacerbated price hikes in the industry last year when steel was in short supply in this country. But that problem has eased and the lawmakers are expected to extend the current import quotas without serious controversy.

In another trade-related development, Bush decided formally Tuesday not to block on national security grounds the proposed acquisition of Palo Alto-based Monsanto Electronic Materials, a silicon wafer maker, by Huels AG, a West German firm.

Opponents of the sale had asked the Administration to intervene in the case, contending that the transaction would pose some national security risks. Monsanto Electronic Materials is the nation’s last remaining major producer of silicon wafers.

But a high-level U.S. review board found late last month that there is no evidence that the transaction will threaten U.S. security interests. U.S. officials said Huels had provided written assurances that it would keep the plant and research facilities inside the United States.

Hills’ hint at some flexibility in the negotiations with the European Community over agricultural subsidies appeared to buttress a similar impression conveyed during her confirmation hearings in late January.

In the past, the United States has insisted that the Europeans agree to eliminate all agricultural subsidies by a specific date, perhaps as late as the year 2000. Hills said she still supports that proposal in principle, but she hinted that she might agree to softer wording.

The dispute over agricultural subsidies has been the main sticking point holding up movement on the 96-country Uruguay Round trade talks during a midterm review session in Montreal last December. Negotiators are scheduled to meet again in April.