Canadian Ambassador Peter M. Towe warned U.S. steelmakers yesterday not to file antidumping complaints against the Canadian steel industry and said any such complaints could "only be characterized as harassment and protectionism."
Towe made his remarks in the heart of steel country yesterday when he addressed a joint meeting of the World Affairs Council and the Rotary Club of Pittsburgh. Towe's warnings responded to threats made by U.S. Steel Chairman David M. Roderick that his company made file antidumping charges against the steelmakers of America's largest trading partner.
Roderick had caused a furor among the European Economic Community last March when his company filed antidumping complaints against steelmakers in seven European countries, a move that the Carter Administration tried to prevent.
Then Roderick said he planned to file import actions against the Japanese and hinted in an interview with The Washington Post that the Canadians may be next. A top Japanese steel official also charged yesterday that they are being harassed by U.S. Steel.
Towe said that antidumping laws "are not per se protectionist. However, if the system is abused -- if petitions are being field against trading partners who are not dumping, who are competing fairly and squarely in the U.S. markets -- they can only be characterized as harassment and protectionism."
"I consider this would be the case if petitions were to be filed against Canadian steel interests, particulary as Canadian exporters have already been given a clean bill of health by your own Treasury Department under the trigger-price-mechanism system," Towe said.
Under the trigger-price mechanism, an antidumping investigation is initiated against a foreign company that sells steel here at prices below the cost of production. Canadian steelmakers were allowed to sell steel here below the trigger prices because those prices aren't below their costs of production.
"It would be especially galling for Canada because while our steel firms have enjoyed success in the U.S. market, Canada-U.S. trade in steel and steel products is still massively in the U.S. favor," Towe said.
On Tuesday U.S. Trade Representative Reubin Askew told a group of business executives here that the Canadians can make steel more cheaply and invest in modern equipment partly because they are able to depreciate their steel equipment in two years compared with 12 years for U.S. companies. t
Askew also warned against the growing mood of protectionism, a theme Towe carried throughout his talk.
"Another aspect of the U.S. domestic scene which is of concern to me is the trend by both federal and state governments to adopt ppreferential Buy America legislation," Towe continued. "Sixteen states now have Buy American statutes of one sort of another which serve to restrict procurement from non-American sources, including your neighbor to the north."
"The Commonwealth of Pennsylvania, I am told, has a law on its books which establishes a preference for U.S. steel products," Towe said. "And I was dismayed to learn only this week that New York will soon have a similar statute which could severely impinge on Canadian steel and Canadian steel products exported to that state."
Carter administration officials have attempted to cool the protectionist mood sweeping Congress and areas of the country particularly hard hit by the current recession such as Michigan, which is suffering from declining car sales, and Pennsylvania and Indiana, which depend heavily on steel production.
On Tuesday both Askew and Commerce Secretary Philip M. Klutznick warned that protectionism is contrary to U.S. interests.
In a related development, a Japanese steel official, Hiroshi Takano, yesterday harshly criticized U.S. steelmakers for threatening to file antidumping cases against Japanese steel producers.
Takano, executive vice president of Nippon Kokan K.K., one of Japan's largest steelmakers, said that U.S. steel executives have been harassing Japanese steelmakers.
"What has been of great concern to us are the misguided allegations by some American steel executives concerning Japan's steel policies and trading practices," Takano said.