Senate Defeats Quotas on Steel Imports

Under heavy pressure from the Clinton administration, the Senate easily derailed a quota bill Tuesday designed to protect beleaguered U.S. steel producers from what they claim has been a flood of illegally low-priced imports.

Voting 57 to 42, the Senate refused even to allow the House-passed measure to come up for a vote, effectively killing the legislation. Opponents echoed the administration line that setting quotas to help the steelmakers would hurt the rest of the U.S. economy, particularly agriculture, and possibly ignite a trade war.

“We all have strong feelings about issues like this in our states,” said Senate Majority Leader Trent Lott, a Mississippi Republican. “But free trade has been shown time and time again to benefit American consumers. We should not start down the trail of imposing quotas here and there.”

The bill would have imposed quotas on steel imports for three years to bring their importers’ shares of the market down to where they were in 1997, before economic meltdowns in Southeast Asia, South America and Russia caused steelmakers in those areas to dump steel on the only healthy open market in the world--the United States.

World trade agreements prohibit nations from “dumping” goods on foreign markets at prices lower than they sell for at home. U.S. steelmakers contend that foreign companies have breached trade laws by dumping steel, getting illegal subsidies from their home governments, and at times pricing the product for less than it cost to make.

Those illegal actions, in turn, have caused profits to fall and forced smaller steel companies to fire workers, the U.S. industry has said.

Strong political cross-currents were at play in the quota debate. Hundreds of steelworkers rallied on the Capitol grounds in support of the bill, while farmers pleaded with senators in agrarian states to vote against it.

The lopsided tally in favor of killing the bill without a veto or final vote was believed to be strongly affected by the Clinton administration’s desire to minimize damage to the presidential ambitions of Vice President Al Gore.

“It’s not over,” declared Sen. John D. Rockefeller IV, a West Virginia Democrat and lead supporter of the bill. He estimated that the administration had peeled away at least a dozen of the votes he expected.

Rockefeller said supporters of the legislation would regroup to devise a new strategy for their campaign, perhaps by attaching amendments to other legislation.