The West German cabinet threw an unexpected monkey wrench into European Community efforts to avert U.S. duties on imported steel yesterday. But government and industry officials on both sides of the Atlantic are trying to strike a deal by 5 this afternoon, when a decision to impose tarrifs goes into effect.
The European Community, generally known as the Common Market, called an emergency ministerial meeting for today after its permanent representatives in Brussels failed yesterday afternoon to reach an accord in a transatlantic trade dispute that has strained America's relations with its Western allies for almost a year.
The last-minute hangup is over the Bonn government's opposition to limits on steel pipe and tube exports, a key point in any U.S. agreement to trade voluntary quotas for tarrifs.
Diplomatic sources here said Germany took the hard-line position because the U.S. Department of Commerce and U.S. International Trade Commission found that its steel companies received little, if any, government subsidies, while its fellow members of the Common Market provided large amounts of state aid. Germany, Europe's largest steel producer responsible for one-third of all Common Market sales to the United States, therefore would be largely unaffected by any American tarrifs.
"Our taxpayers should not be made to pay for the sins of others," said West German spokesman Dieter Stolze in Bonn yesterday morning as he announced the surprising cabinet decision by the new government of Chancellor Helmut Kohl.
Nonetheless, both American and German officials sounded optimistic notes yesterday. Stolze said his government was "very confident" that agreement could be reached. U.S. Commerce Secretary Malcolm Baldrige, for his part, said "we're talking with them and we're working toward a satisfactory arrangement. I'm reasonably obtimistic we are going to reach it."