The United States has called for new consultations with its Western European allies to discuss the nearly threefold increase in Europe's share of the U.S. market for semifinished steel products, the Commerce Department reported yesterday.
The request came after demands by Bethlehem Steel Corp. and the United Steelworkers of America that the United States open talks with the Europeans in an effort to stop a proposal to ship British slab steel to the United States for finishing by U.S. Steel Corp. Slab steel is a form of unfinished steel.
An agreement last October that limited European steel exports to the United States allows for either side to request consultations on trends "that threaten to impair the objectives of the arrangements." Although unfinished steel is not covered by the export limitations, it is included in the consultative section of the accord because it can distort trade between the United States and the European Economic Community.
Although the shipment of slab steel for finishing here is not mentioned in Commerce's letter to the EEC, steel sources here see it as the underlying reason for the United States seeking the consultations now.
It is unclear among U.S. steel experts, however, what the U.S.-EEC consultations could do about the proposed deal between the government-owned British Steel Corp. and U.S. Steel.
In its letter to the Commerce Department, Bethlehem Steel suggested the October quota agreement be changed to include slab steel either by putting it in a category requiring an export license or by reducing the permitted European exports of finished steel on a ton-for-ton basis to offset the shipments of slab steel.
The complex limits on European steel exports to the United States prevented the imposition of penalty tariffs as a result of findings that American steel companies were injured either by subsidized or dumped steel from the EEC countries. The 11th-hour agreement last year, which was announced by President Reagan, ended what was considered a serious breach in America's relations with its European allies.
As a result of the U.S.-EEC agreement, American steel companies withdrew 42 unfair trade cases they had filed against the Europeans. U.S. Steel has taken the lead in fighting what the industry calls unfair competition from imports.
U.S. Steel's proposal to buy 3.5 million tons of slab steel from Britain to be finished at its Fairless Works near Philadelphia greatly upset the rest of the industry. The slab steel would come from British Steel's large and outdated mill at Ravenscraig, Scotland. As its part of the deal, U.S. Steel would stop producing basic steel at Fairless and instead roll the imported slabs into finished steel.
Both other companies and the United Steelworkers attacked the deal, which reportedly has run into a number of complications involving the money British Steel would invest in the Fairless Works.
The union, which agreed to wage concessions in its latest contract, said the plan would throw 2,000 steelmakers out of work. U.S. Steel, however, said the alternative was to close the entire Fairless Works, which would add to unemployment in the domestic steel industry.