Bush Extends Steel Quotas for 2 1/2 Years : Import Curbs Set to Balance ‘Unfair Trade’

President Bush, calling on U.S. trading partners “to restore free and fair trade” to world markets, today extended the nation’s steel import quotas for 2 1/2 years.

Answering the call of steel-producing states as expected, Bush said, “I am taking this step to permit the negotiation of an international consensus to remove unfair trade practices and to provide more time for the industry to adjust and modernize.”

The U.S. steel industry has sought a continuation of the voluntary restraints on imports, which were instituted in 1984 for five years. The restraints had been scheduled to expire Sept. 30.

‘Transitional Extension’

Bush, who was under pressure for several weeks to extend the quotas as he promised on the campaign trail, said he was directing the U.S. trade representative, Carla Anderson Hills, to negotiate a “2 1/2-year transitional extension of the restraints.”

The restrictions now limit steel imports from countries covered by the voluntary restraint arrangements to 18.4% of the U.S. market.

The extension will cover all major product categories, the President said in a statement announcing his decision. During the transition period, the ceiling on imports from countries agreeing to the voluntary restraints will be increased at an annual rate of 1 percentage point.

Officials said Bush had made a tentative decision about a month ago after the issue was reviewed by his advisers and the International Trade Office.

“In extending the VRAs (voluntary restraint arrangements) for a transitional period, I am mindful of the need to improve the availability of steel in the United States and to promote price competition,” Bush said. “Accordingly, to ensure that adequate supplies of competitively priced steel are available on a timely basis, the Department of Commerce will expedite and streamline the existing short supply mechanism.”

‘Considerable Progress’

At the same time, the President noted that the industry has “made considerable progress” since 1984 toward improving its competitiveness and modernizing its production facilities.

“I urge the industry to continue its modernization and worker retraining programs, and will support legislation to that effect,” Bush said.

The steel industry complained that its products were at a disadvantage in the U.S. market because foreign governments subsidize their steel producers. In exchange for the voluntary restraint arrangements, the industry committed itself to reinvest all of its profits in steel-making, which it did.

But Bush said the voluntary restraints will end on March 31, 1992, “consistent with this Administration’s commitment to free and open trade.”

“Thereafter, U.S. steel producers, like other American industries, will continue to rely on domestic trade laws as an ultimate assurance against the effects of foreign unfair trade practices,” Bush said.