'No' to Steel Protectionism

August 01, 1993

The U.S. International Trade Commission has done itself proud by rejecting administration-backed attempts by the American steel industry to go the way of protectionism in fighting foreign competition. By throwing out 40 of the 72 complaints filed by the big integrated U.S. companies, the ITC may have opened the way for a global Multilateral Steel Agreement and almost certainly eliminated a major blocking issue to worldwide trade reforms.

Undoubtedly the major integrated companies, including Bethlehem Steel with its state-of-the-art plant here at Sparrows Point, have suffered from foreign imports dumped at skewed low prices or aided by heavy government subsidies. But the industry's problems also are the result of stiff competition from domestic mini-mills and other factors, especially high labor costs.

The ITC decision is good news for consumers, including auto buyers, since it will tend to hold down prices of steel products. It also should accelerate negotiations for a worldwide steel agreement leading to more open markets, lower tariffs and an end to some of the unfair practices that were the target of the American industry's complaints.

Most important, the measured ITC response carefully sorting out which complaints were justified and which were not was well timed. As negotiations intensify for a new General Agreement on Tariffs and Trade (GATT) by year's end, France has been using the American steel industry case as an excuse to try to torpedo last December's Blair House accord on agriculture, probably the most serious impediment to trade reforms. Now its European Community partners will be in a stronger position to stop French obstructionism -- and the Clinton administration should insist that they do just that.

As for the quasi-judicial ITC, it has shown the world that it is not a patsy either for protectionist-minded U.S. industry and labor or for an administration that was inclined to go along despite its brave talk about free trade. The ITC members, three Republicans and three Democrats serving single terms, decided the steel case on its merits and, hence, bolstered the reputation of the whole U.S. trade adjudication apparatus. Good job.

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