White House promises action to avert steel crisis

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10/26/2000 16:13:00 ET

UPDATE 1-White House promises action to avert steel crisis

WASHINGTON, Oct 26 (Reuters) - The White House on Thursday pledged to take "all reasonable steps" to prevent a repeat of the 1998 steel industry crisis, but stopped short of launching new U.S. trade action against imports as requested by industry leaders, steelworkers and the governors of 10 states. "We have learned much since 1998 and plan to take quick action that hopefully can prevent further harm to the industry and its workers," White House Chief of Staff John Podesta said in a letter to George Becker, president of the United Steelworkers of America union.

Podesta outlined action the Clinton administration was taking to dampen a sharp increase in imports from Ukraine, Taiwan, India, China and other suppliers and to prevent any circumvention of current U.S. import restrictions. White House officials also want to meet with steelworkers and steel industry leaders for a "discussion on the future of the industry, its workers and the steps we can take together on their behalf," Podesta said.

But Representative Peter Visclosky, an Indiana Democrat who is one of the leaders in the U.S. House of Representatives on steel issues, said the White House promises rely too much on the cooperation of foreign countries and institutions. "The stuff we have control over, we"re going to study," Visclosky said. But he expressed his disappointment that President Bill Clinton delayed a decision on a so-called section 201 trade investigation that could lead to restrictions on a wide range of steel-product imports from a number of countries. That section of a 1974 trade act allows the administration to restrict imports that the U.S. International Trade Commission determines are a threat to domestic producers. Last week, Becker and 74 steel industry executives urged Clinton to take a number of steps to avert a new steel crisis. They warned that imports once again were reaching the levels seen in 1998 that forced some firms into bankruptcy and others to lay off thousands of workers.

Podesta said the White House was "very concerned" about the issues raised by the steelworkers and industry executives. "In that regard, we intend to take all reasonable steps to prevent a steel crisis from taking hold again," he said in his letter. INDUSTRY ASKS FOR INVESTIGATION The industry officials asked for "comprehensive import relief," including a section 201 investigation. Governors of Alabama, Delaware, Indiana, Iowa, Maryland, Minnesota, North Carolina, Pennsylvania, South Carolina and West Virginia also have called for a section 201 investigation. A House resolution with 235 Democratic and Republican co-sponsors makes the same plea. Rather than take immediate action on that front, Clinton has directed U.S. trade officials to hold "senior-level consultations" with countries that have rapidly increased steel shipments to the United States, Podesta said. Commerce Undersecretary Robert LaRussa already has held the first of those talks in Kiev, Ukraine. "Our goal will be to alert these trading partners to our concern about the dramatic recent increase in their shipments to our market, and to signal that we are giving urgent consideration to your request for relief," Podesta said in the letter to Becker. U.S. Treasury Department officials also will ask the World Bank, the European Bank for Reconstruction and Development and other relevant multilateral development banks for a moratorium on lending for construction of new steel production capacity, Podesta said. "Lending institutions supported by American taxpayers should not be adding to global excess capacity in the steel industry," Podesta said.

The Commerce Department also will accelerate a study on factors affecting the competitiveness of U.S. producers, with particular attention on how foreign steel subsidies and market-distorting practices affect U.S. costs, he said.


-- Martin Thompson (mthom1927@aol.com), October 26, 2000

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