It is up to the European Economic Community to avert retaliation by U.S. steelmakers against exports of low-priced steel to the United States, Commerce Secretary Malcolm Baldrige said yesterday.
Baldrige said he told EEC officials over the weekend that they created the trade ripples across the Atlantic over steel imports and now they will have to calm them before U.S. steelmakers take the problem into their own hands by filing massive complaints of unfair trading practices.
But Baldrige said he didn't suggest to EEC officials ways to resolve the conflict and that any solution by the Europeans would have to be voluntary.
The EEC officials said they will send a team of technical-level officials here this week to try to work out a solution, Baldrige said.
"You can't cure a sick European steel industry by bleeding off of a sick American industry, and since the Europeans were the ones that violated the system, it's up to them to fix it," Baldrige said he told EEC officials last weekend.
"I also told them even with European assurances, there's no way I could or would guarantee the American industry would not bring suits," Baldrige continued.
He said he discussed his trip with William J. De Lancey, head of the American Iron and Steel Institute and chairman of Republic Steel Corp., who said the industry's immediate reaction to the discussions was "skepticism." Baldrige said he didn't know what else the industry planned to do, and De Lancey could not be reached for comment.
Massive private industry complaints against European steel producers could lead to the destruction of the trigger-price mechanism, Baldrige said. The TPM is a system under which the government monitors prices of foreign steel and initiates an investigation if steel is imported at prices below specified levels.
Baldrige has said he might have to suspend the TPM if U.S. companies file massive complaints against foreign steelmakers. Trade tensions then would increase, and the American companies would be forced to take the foreign steelmakers to court, Baldrige said.
"Right now it's up to the Europeans to convince the Americans the Europeans will go back to respecting the integrity of the TPM" so the U.S. industry won't file complaints against them, Baldrige said.
The Commerce Department already has initiated its own complaints against foreign countries, two of them against EEC members France and Belgium.
"The position of this administration is we would prefer to prosecute the cases we have already self-initiated to see if this strong action by the U.S. government would have the desired result without the inevitable heightening of trade tensions between the European Community and the U.S. that a large number of industry suits would bring," Baldrige said.
How Europe can resolve the situation "is their problem completely," Baldrige said. "The only indication we have is they feel that they would like to see the TPM continued. How they're going to convince the U.S. industry is their problem."