The Carter administration's new plan to aid the ailing steel industry is facing potential derailing action from an unlikely source - the independent International Trade Commission.
Agency sources say the panel is seriously considering moving on its own against what some staffers regard as "unfair trade practices" by European steelmakers - possibly leading to import restrictions.
At the same time, the commission's general counsel has written a memorandum criticizing the administration's new "minimum-pricing" plan for steel imports and declaring it to be extra-legal."
While the panel's actions would not prevent the White House from launching its new steel proposals, they nevertheless could prove a serious thorn, both in practical terms and from a political standpoint.
The White House plan for establishing a minimum-price system is designed to ward off formal limits of any kind of steel imports. If the ITC does rule unfair trade practices abound, it could be cut off imports entirely.
Moreover, the agency has significant influence among some conservative members of Congress, who have supported its decisions on import damage to domestic industries. Liberals view the agency as protectionist.
The panel has scheduled a rare closed meeting Dec. 15 to vote on whether to begin an unfair-practices action - the first step in a new procedure that could lead to import restrictions.
At a recent meeting, members voted 4 to 2 to keep secret the staff documents on the European steel situation and to withhold them from the Carter administration. The panel has three Democrats and three Republicans.
The unfair practices probe would come under a previously obscure section of the 1975 Trade Act that allows the panel to prosecute foreign companies on its own - recommending, if necessary, to halt goods at the border.
The commission has invoked the procedure in only one other instance - a case involving the cut rate leasing of European-made wide-body passenger jets to Eastern Airlines. The panel's action was criticized by the administration.
Sources close to the commission warned that if the panel acts on its own, it "could pose a very great danger" to the administration's new steel program. The White House is preparing to unveil the steel plan shortly.
The staff investigation that prompted commission to consider the unfair-practices action has been withheld from the public. A commission official said yesterday reporters would not be permitted to examine the document.
However, knowledgeable sources said the study charged three potential violations by European steelmakers:
So-called anti-competitive pricing, or the sale of European steel here at prices below that the agency's staff has estimated are the producers' own costs.
Tied-end pricing, or the pegging of U.S. prices of European-made steel at a fixed point below the prices charged by American steel producers: and
Actions that effectively block U.S. steel makers from entering new markets. The report charges American firms often are shut out of new markets because European producers already have taken over with cutrate prices.
The memo on the administration's minimum-pricing system declared the program, if successful, would "operate outside, and in avoidance of" the 1974 Trade Act and "probably would not withstand judicial review" if challenged.
It also criticized the plan as aiming to establish an international steel cartel that would be "inconsistent with the policies of the antitrust laws of the United States." The program effectively would fix minimum prices.