U.S. invites foreign steelmakers to seek exemptions from tariffs

O'Neill says `significant' number of overseas mills need not pay new duties

April 13, 2002|By BLOOMBERG NEWS

LONDON - The United States will likely grant a "significant" number of exemptions from steel-import tariffs imposed last month, Treasury Secretary Paul H. O'Neill said yesterday in an attempt to defuse trade complaints by almost two dozen nations.

Foreign steelmakers have until early July to seek exemptions from levies of as much as 30 percent set March 5. Many of the 1,000 requests the United States has received will be granted, O'Neill said on the British Broadcasting Corp.'s Today program.

"All of the exemptions or exclusion requests will be carefully considered," he said. "I expect a significant proportion will be decided favorably."

The prospect that the duties may be made ineffective has alarmed U.S. steelmakers, which want the administration to protect an industry in which 19 producers, have failed since 1998. Bethlehem Steel Corp., which has a major mill in Sparrows Point, filed for Chapter 11 protection in October.

"We are very concerned and we are making our concerns known," said Daniel R. DiMicco, chief executive officer of Nucor Corp., the second-biggest U.S. steelmaker.

So far, the exemption requests aren't enough to weaken the import protection, DiMicco said. Most are for specialty steel, such as high-strength steel used for tools. Those products don't compete against more common products made by Nucor, such as steel sheet and bars.

Analysts said the administration was looking for a way out of the tariff dispute after criticism from the European Union, Japan, China and other nations.

"This is a way for them to back off," said Joe Francois, an economics professor at Erasmus University in Rotterdam, said of the administration. "Already half of imports were exempt," he said, referring to products from Canada and Mexico and most developing countries.

The United States considers the trade dispute to be a "short-term phenomenon," O'Neill later told reporters at the London residence of Gordon Brown, Britain's chancellor of the exchequer. Steel overcapacity "is only going to be solved by a worldwide process," he said.

For now, the EU and other governments are turning to the World Trade Organization to settle the dispute.

Altogether, five governments and the 15-nation EU have lodged complaints against the U.S. measures at the WTO in Geneva.

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