Commerce Secretary Malcolm Baldrige said yesterday it is up to the Europeans to break an impasse with the U.S. steel industry over steel imports that has led to the worst trade crisis in recent years.
Last week the Reagan administration ruled that European governments had unfairly subsidized their steel exports here and required them to post cash or bonds in the amount of the subsidies until a final determination is made in August. The administration took the action on complaints filed by seven of the nation's largest steel makers after the breakdown of talks between the European Economic Community, the U.S. steel industry and Baldrige.
Baldrige, in an interview, said he still hopes for a settlement. He said the EEC and U.S. steel makers were unable to reach an agreement on European steel exports last week because the EEC nations couldn't agree among themselves on voluntary limits proposed by American steel executives that would include steel tubing for the oil industry.
The Europeans wanted to keep so-called oil country goods out of any voluntary agreement because that accounts for about 20 percent of their exports. The U.S. industry was afraid that the Europeans would shift exports from restricted goods to the oil country products if the latter were not limited, Baldrige said.
"The U.S. industry won't budge," on the oil country tube and pipe issue. "The EC will have to get together on that."
"If both sides agree there will be less trade friction than if the suits are carried to the ultimate," Baldrige said. "It depends on the Europeans. We're ready to negotiate. We've always been ready to negotiate."
When would negotiations take place? "I don't have any timetable," Baldrige said. "It's up to them," meaning the Europeans. A range of export restraint limits were discussed, Baldrige said, but he wouldn't divulge what they were.
Despite the gravity of the trade dispute, Baldrige said Commerce's action was a blessing in disguise. If the complaints had not been pursued "in such a clear-cut case . . . we would see a real rise in protectionism in Congress," Baldrige said. "This action will help because it will show the administration is willing to enforce the trade laws on the books."
Baldrige said he didn't think the finding would lead to a trade war among industrialized countries despite warnings of possible retaliation by EEC Vice President Etienne Davignon last week. On June 22 European ministers will discuss possible measures against subsidies the U.S. government allegedly provides for its exports to Europe.
"I don't think the EC wants" a trade war, Baldrige said. "We certainly don't want one. I really don't expect any level of retaliation" beyond close inspection by the Europeans of U.S. support for its agriculture and textile exports.
Commerce said the nine countries illegally subsidized steel companies to sell goods in the United States through unfair government loans, regional development grants, new capital, cash payments and failing to collect loans it had made. The countries involved are West Germany, the United Kingdom, France, Belgium, Italy, the Netherlands, Luxembourg, South Africa and Brazil.