The Reagan administration yesterday rejected a last-ditch effort by the European Economic Community to end a major trade crisis over steel imports, saying the European proposal would not relieve the injuries to the U.S. steel industry.
The EEC had proposed slashing steel exports to the United States from four member countries by 10 percent until 1985 if the Reagan administration suspended investigations of its steel imports.
The EEC had suggested that the administration enter into bilateral agreements with the EEC, Belgium, France, Italy and the United Kingdom to reduce imports of certain products by 10 percent from 1981 levels. According to preliminary findings by the Commerce Department, steel makers in these countries last month received unfair government subsidies as high as 40 percent of the value of the steel product.
The EEC also proposed that West Germany, the Netherlands and Luxembourg, which had been subsidized from less than one percent to 8 percent according to Commerce, would not take advantage of export limits proposed by the other four countries.
Commerce Secretary Malcolm Baldrige rejected the proposal two days before a settlement deadline, saying steel imports from Europe that injured American steel makers had increased 29 percent between 1980 and 1981 and that the European proposal to cut exports here by 10 percent "was simply not sufficient to remove the injury as required" by U.S. law.
Roy Denman, the EEC's senior trade negotiator, was quoted last night as saying a special meeting of EEC ministers may be called to examine America's response to the proposal.
"We welcome any attempt by the Community to settle the unfair steel trade cases between the U.S. and the EEC," Baldrige said. "But unfortunately, these proposals are not legally acceptable."
The EEC had hoped its proposal would end a major trade problem that has plagued both sides of the Atlantic for months and threatened to bring the trading partners to the brink of a trade war.
The problem reached its peak last month when the Commerce Department preliminarily ruled that the 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 on Aug. 24. At that time the duties--some as high as $250 a ton--could become permanent.
The rulings were made on petitions filed by seven of the nation's largest steel makers against the seven EEC countries and South Africa and Brazil.
However, Baldrige said that even if the yesterday's proposal had been acceptable, tension between the two trading partners would not have been eliminated. Baldrige said that 21 other complaints of unfair trading practices involving steel are pending.
Baldrige said that overall settlement of the cases is the best way to relieve trade tension, and he still is willing to negotiate with the Europeans to end the crisis.
High-level U.S. and EEC officials have attempted to head off final determination of the cases.