A group of 20-stee-state senators have warned the White House that unless a separate trade agreement is negotiated for steel, the president will have difficulties getting "congressional approval" of the multi-lateral trade agreement now being hammered but in Geneva.
The letter was triggered by reports that the administration has offered to cut its steel tariffs by 40 percent at the multi-lateral trade talks.
Administration trade officials have quarreled privately that the 40 percent number being put forth by steel industry officials is wrong, but decline to say what or how much the U.S. has offered to cut tariffs, citing the secrecy of the negotiations.
Since the average U.S. tariff on steel imports is only 6 percent, a 40 percent reduction would mean tariffs of about 3.6 percent.
Industry and union officials have been pressuring the administration for a separate agreement among the world's steel producing nations that would set trade rules prohibiting dumping and export subsidies during periods of overcapacity and slack demand for steel.
U.S. European and Japanese negotiators hope to have a broad agreement on international export subsidies, which should address some of the steel industry's problems, by the Bonn economic summit on July 16 and 17.
The Organization for Economic Co-operation and Development, made up of the 24 Western industrial powers, has been holding talks for the past year on trade in steel, but the U.S. industry insists it wants a broader, more formal structure that includes lesser developed producers as well.
Less developed countries, such as South Korea and Brazil are accounting for more and more of the world's steel exports.
In a letter to Special Trade Representative Robert Strauss, obtained by The Washington Post, the Senators warned that the "jobs and profits lost as a result of last year's devastating experience make it imperative that you impress upon representatives of steel exporting countries the need for an international steel monitoring agreement.
"Committments must be obtained which will provide the basis for a long-range solution to international steel problems and not merely an agreement to continue discussions."
Senate sources said the legislators - among the signers was retiring Foreign Relations Committee John Sparkman (D-Ala.) - are becoming concerned that the only leverage the U.S. has in getting a worldwide agreement on steel in tariffs, we'll have no leverage to get anything in return," one source said.
Although the 20 signatories to the letter, which was drafted by Sen. Birch Bayh (D-Ind.), are far too few to block a trade agreemtn - which is supposed to be completed by the end of the year and presented to the Senatre in January - the growing protectionist sentiment in Congress could attract legislators from other states with trade problems to back the steel caucus.
About 35 Senators have at one time or another been affiliated with a loose-knit steel caucus, while more than 150 House members have joined a formal, staffed House steel caucus.
As part of its concession to the steel industry's problems, the Carter administration devised a special set of do facto minimum prices for steel imports which took full effect in May.