Steel Trade Complaints Advance

Article excerpt

AFTER more than a decade of struggle, the United States steel industry is starting to roar again.

Its first bellow came six weeks ago. A dozen domestic producers filed a host of unfair-trade complaints against steelmakers in 21 foreign countries. On August 10, the US International Trade Commission found a "reasonable indication" of injury in 72 of the 84 cases the industry filed.

Of course, when one lion roars, others answer.

A spokesman for Canadian steel producers said he was "deeply disappointed." Canada intends to look into dumping charges against US steel producers. Mexico threatens to do the same. Expect more howls from the world's two largest steel producers - the European Community (EC) and Japan.

The rising chorus of protest in steel illustrates the jittery state of world trade. But it also disguises some of the positive developments in steel.

"Something has to be arranged," says Rev. William Hogan, an economics professor at Fordham University in New York and author of 10 books on the steel industry. He is hopeful that steel-exporting nations will come to terms. "I think they will still try to negotiate."

The last time the US industry bellowed so much, it was teetering on the edge of a deep abyss. It was the early '80s. Domestic steelmakers were woefully outdated and uncompetitive with the rest of the world. In 1984, the US negotiated voluntary restraint agreements. The VRAs limited steel imports so the industry could get back on its feet. In March, the VRAs expired.

By all accounts, the industry is in far better shape than it was a decade ago. Leaner, meaner producers

"The state of the industry is much, much stronger than at any point since these trade cases have been heard," says John Jacobson, head of a steel consulting firm in Philadelphia. "The industry has taken upon itself to reinvest and to work very hard to lower its costs and become competitive."

US mills are modernized. The percentage of continuous casters (an advanced production method) has soared from 20 percent in 1980 to 75 percent last year. It used to take 10 man hours to make a ton of steel; the industry average is now down to five hours. The industry has halved its trade deficit - the difference between exports and imports.

Now, with renewed economic clout, the industry is arguing that other nations should stop subsidizing their steel industries. Of the 21 countries accused of unfair trade practices, the International Trade Commission exonerated only Taiwan. …