President Carter's new plan to establish a system of minimum import prices to aid the ailing steel industry is being regarded as a fragile - and enly temporary - solution to the problem.
In the wake of the program's fanfare-filled unveiling earlier this week, analysts who have examined the package say it isn't quite as tidy as the White House first presented it.
Matthew J. Marks, the former Nixon administration trade official who suggested the new mechanism, describes it as "a short-term pallrative to distored price conditions in an over-supplied market.
"It remains to be seen," he says, whether the new reference-price system turns out to be "more protectionist, or less," than imposition of more traditionatist import quotas would have been.
The problems are two-fold. For one thing, there's the thorny question of when levels policy makers will choose for reference prices - the minimums foreign producers can charge here without risking anti-dumping action.
Trade experts warn too low a reference price - the minimums foreign producers can charge here without risking anti-dumping action.
Trade experts warn too low a reference price would put most European producers out of business here - prompting the Common Market to "pull out" of its tacit agreement and retailiate against other U.S. exports.
On the other hand, two high a reference price would give U.S. steel makers too much room to raise domestic prices - a move they already have hinted is coming, and which the administration wants to avert.
For another, there's the question of what to do for an encore once the steel plan is in place. By everyone's assessment, the pricing plan is only a stopgap measure. The real issue is what to do about steel's structural ills.
To be sure, as administration officials have conceded, the reference price system was no one's idea of a perfect solution - only the least-worst of several available alternatives.
The industry itself wanted import quotas, but policy makers were fearful they would allow too much leeway for price-raising. "Once you fill the quotas, there's really no competition," one official says.
And earlier plans to call a multinational conference and divide up the international market among the major steel-producing nations had been attacked be free traders as cartelization of the industry.
One of the most telling arguments for the reference price system was that it would buy time for needed longer-range "reforms" and still stave off quotas or other quantitative restrictions.
At the same time the plan would help exert "discipline" on domestic steel prices. Under the reference-price system, the more American steel makers raise their prices, the more imports get in under the wire.
The problem is, the package still doesn't give the industry enough to guarantee its recovery from present economic problems - a deficiency that makes the plan more politically vulnerable, no matter what its other merits.
Although the program includes-some tax breaks and a relaxation of government pollution-control requirements, many middle of-the-road analysts regard these as modest. If the pricing plan falters, the industry may seek more.
The price-setting exercise will be closely watched. What the reference price plan is designed to do is to stop the big discounting by European and Japanese producers. That could take a minimum of $340 a ton.
But the administration already is under pressure from U.S. producers to push the reference prices even higher. David M. Roderick, president of U.S. Steel Corp., asked this past week for a price of $360 or more.
In theory, the reference price level-should be set easily. The minimums are supposed to represent the cost of the most efficient foreign firm's production plus overseas shipping and a hefty 8 per cent profit.
But despite the administration's insistence to the contrary, most outside observers believe the price-setting will be based on political consdierations. "It's purely a political decision at the margin," one analyst says.
One sleeper may be the recent threat by the U.S. International Trade Commission to launch its own import limiting actions - a decision the agency is scheduled to make at a closed meeting Dec. 15.
Carter administration have dismissed the ITC initiative as unimportant. But Harald Malmgren, a trade negotiator during the Johnson and Nixon administrations warns it could prove a bombshell that may wreek the plan.
Still to many observes, the key question is what the administration can do after the program is in place to help resolve the longer-range problems that both the U.S. and foreign steel producers face.
What Marks and many other experts propose is a conference of the major producing nations to plan new economic and investment incentives possibly in connection with the coming summit meeting planned for 1976.