Newspaper article The Christian Science Monitor

Should the US Drop Steel Quotas? NO: Not with Continued Foreign Dumping. [ Cf. YES: They're Unneeded and Fuel Inflation ]

Newspaper article The Christian Science Monitor

Should the US Drop Steel Quotas? NO: Not with Continued Foreign Dumping. [ Cf. YES: They're Unneeded and Fuel Inflation ]

Article excerpt

PRESIDENT BUSH is the fourth president in recent history to be faced with the problem of how to enforce America's trade laws without banning steel imports from many of our allies in Europe and Latin America. President Nixon tried quotas. President Carter tried trigger prices. Neither worked. President Reagan instituted Voluntary Restraint Agreements in 1984, and they are working. In the absence of a negotiated end to massive foreign steel subsidies and dumping, the VRA program should be extended for another five years.

VRAs are an effective way to cap the dumping of foreign subsidized steel on our market and prevent the liquidation of our domestic steel industry. They don't require a large bureaucracy, since foreign governments must police their own exports. Most important, they have allowed domestic steel producers to make a remarkable comeback from the brink of disaster. Today our steelmakers produce for consumers some of the highest-quality, lowest-priced steel in the world.

The world trade conditions that gave rise to the VRA program haven't changed one iota. Scores of countries including our European allies, Japan, South Korea, and Brazil still commit unfair trade practices, heavily subsidize their companies, and dump steel. The expansion of world steel production in recent years has led to a structural overcapacity in excess of 100 million tons. Foreign steel- producing nations fight back by rigorously restricting imports and "cramming" steel into export markets. Their system provides jobs, not profits, for their steelmakers, and those subsidized tons, or "social tons" as they are called, have to go somewhere.

Subsidized production is the only thing that allows many foreign steel producers to stay in business. In the 1980s, European steel producers alone received over $40 billion in government subsidies. Indonesia has recently put more than a half a billion dollars into its steel industry; New Zealand, two-thirds of a billion dollars; and Canada, three-quarters of a billion dollars. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.