Amid a bruising battle in Congress over whether to slap limits on imported steel, the Clinton administration declared yesterday that the U.S. steel industry is no longer endangered by imports -- and drew a predictably scornful reaction from the steelworkers union.
"The steel crisis of '98, in my opinion, is over," Commerce Secretary William Daley said, referring to last summer's flood of steel from abroad that contributed to several plant shutdowns and thousands of layoffs.
He cited figures showing that, in the first four months of this year, steel imports were down 5.5 percent from the same period last year -- and because imports didn't begin surging until April 1998, the crisis appears unlikely to recur, he contended.
Until now, administration officials have refrained from claiming an end to the steel import problem, instead voicing hope that the monthly declines in imports will prove lasting.
Daley's optimism was clearly aimed at bolstering opposition to a Senate bill that would roll back steel imports to pre-crisis levels -- a move the White House says would blatantly violate international trade rules. The House has passed similar legislation, and a key Senate procedural vote -- which Daley admitted would be "close" -- is likely on Tuesday.
"The actions we've taken have worked," he said. Responding to industry complaints of foreign steel being "dumped" in U.S. markets at prices below home market levels, Commerce has leveled stiff duties on Japanese, Brazilian and Russian steel while reaching agreements with Brazil and Russia to suspend those duties in exchange for pledges to substantially reduce steel shipments to the United States.
William Klinefelter, the chief Washington representative for the United Steelworkers of America, derided Daley for "changing his tune" and asserted that while import figures may be falling now, they easily may rise again because of "tremendous overcapacity around the world" in steel.
"The crisis isn't over as far as we're concerned, and the steelworkers are going to continue driving forward on the quota bill," Klinefelter said.
Daley's comments came as his department reported that the U.S. trade deficit hovered at record levels in April. The trade gap narrowed very slightly, to $18.94 billion, as exports rebounded after several months of decline.
The April deficit was the second highest -- after March's record figure, when the gap was $18.95 billion. The March deficit was revised downward from a previous estimate of $19.7 billion. If the trade imbalance for the first four months of 1999 continued at the same pace the rest of this year, the annual deficit would be $218 billion, far higher than last year's record $164 billion.
The huge deficit worries some economists, who fear that it could lead foreign investors to sell U.S. stocks and bonds suddenly because of the belief that a country importing so much more than it exports is living beyond its means. But Daley, said the latest trade figures "continue to reflect the strength of the U.S. economy and relative weakness of many of our trading partners."
Noting that the U.S. trade deficit with China grew to $4.79 billion in April, up from $4.14 billion in March, Daley reacted with some asperity to reports that China is continuing to delay negotiations over joining the World Trade Organization because of NATO'S bombing of the Chinese Embassy in Yugoslavia last month.
China yesterday rejected the explanation by visiting U.S. officials that the bombing was accidental, and Trade Minister Shi Guangsheng was quoted as saying "now is not the time to resume talks" on Beijing's entry into the WTO.
Daley responded, "If they want to use this tragic accident of the bombing as an excuse not to come to the table, that's their position," and he hinted that Beijing might pay an economic price if its efforts fall through to gain membership in the Geneva-based trade body.
Unless China opens its markets as part of an accord for WTO entry, Daley said, "at some point we'll have to sit down with them on a bilateral basis" to discuss Washington's complaints about Beijing's numerous import barriers.
Asked if he was brandishing the threat of sanctions against Chinese products, Daley replied, "I'm not saying we run out and file" a trade case against Beijing, "but we've got to address these things."
Charlene Barshefsky, the U.S. trade representative, said the administration hasn't given up on striking an accord on China's WTO membership despite yesterday's developments in Beijing.
"Plainly they will need to reengage, and I think, given some period of time -- I can't define the `some' -- they will reengage," she said.
CAPTION: HIGH AND HOLDING
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