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U.S. steel industry may receive relief from foreign competition

WASHINGTON (AP) — President Bush's top trade negotiator says the U.S. steel industry may deserve sweeping, short-term relief from a flood of foreign imports.

U.S. Trade Representative Robert Zoellick told Congress on Wednesday that the new administration was looking "very seriously" at employing a rarely used broad trade remedy that would allow imposition of various barriers to protect the domestic industry.

"We are . . . focused on the issue," Zoellick told the House Ways and Means Committee, referring to a number of meetings that he and Treasury Secretary Paul O'Neill and Commerce Secretary Donald Evans have held since taking office with steel executives and union officials.

"I frankly think that the 201 approach could be more productive than all the others," Zoellick told the panel, referring to a section of U.S. trade law that provides for broad protections for industries suffering serious injuries from imports.

Such a move was rejected by the Clinton administration, which believed it would send the wrong signal at the time of the 1997-98 global financial crisis if the United States began retreating behind protectionist barriers.

Instead, the previous administration pursued a country-by-country effort to stem imports by approving a series of anti-dumping cases that raised tariffs against specific countries.

But faced with continued high imports and mounting bankruptcies in the industry, steel companies are renewing the push for broader protection with the Bush administration. Since mid-1997, when the Asian crisis began, 14 U.S. steel companies have sought bankruptcy law protection.

Under Section 201, if the U.S. International Trade Commission found that U.S. steelmakers were being seriously harmed by imports, the administration could impose high tariffs and quotas to limit the amount of foreign steel coming into the country. It could also offer government assistance.

The import relief remedies could only be in effect for a limited time and in return the industry would have to agree to restructure or take other actions to become more competitive.

Zoellick said during his appearance Wednesday that he believes the U.S. industry needs a "significant restructuring," a statement disputed by Rep. Benjamin Cardin, D-Md., who told Zoellick that steelmakers had become significantly more competitive since the 1980s, shutting many old mills and trimming thousands of workers.

Zoellick gave no estimate of when the administration might decide on the steel issue but he said he and other members of the Cabinet are very focused on dealing with the problem.

Rep. Dennis Kucinich, D-Ohio, said there mere fact Zoellick raised a possible 201 case "sends a signal to other countries that they ought to stop their illegal dumping."

But Sen. Jay Rockefeller, D-W.Va., said "now is time for action" rather than promises to consider the issue. Rockefeller has warned that quick assistance is necessary because America's "steel industry is facing the most devastating crisis in its 200-year history."


Via The Associated Press