The Clinton administration is planning new initiatives aimed at aiding the beleaguered U.S. steel industry, possibly including an international conference to address the problem of worldwide overcapacity in steel production, according to administration and industry sources.
The move stems from a desire by the administration to mend fences with the industry and its unions, which accuse the White House of failing to take sufficient action against a surge of steel imports that has contributed to bankruptcies and layoffs at a number of steel companies. Administration insiders are concerned that the bitterness among steelworkers may hurt the presidential candidacy of Vice President Gore, especially after the administration's triumph last month in defeating a union-backed bill in the Senate that would have put a limit on imports.
The initiatives haven't been completed and debate continues about them within the administration. The package was presented last week to industry and union representatives at a meeting with senior Clinton administration officials, including Karen Tramontono, a top adviser to White House Chief of Staff John Podesta and a liaison to labor, and Commerce Department Undersecretary David Aaron. Some of the details were disclosed yesterday by the newsletter Inside U.S. Trade.
The centerpiece of the initiative is the international conference, although according to those at the meeting the administration officials also vowed to strongly enforce the trade laws and proposed a study by the International Trade Commission of the industry's import woes.
The administration officials didn't back off from their objections that some of the new trade laws sought by the industry would violate world trade rules, but they did promise to discuss legislative proposals. The industry is seeking support for a bill, sponsored by Reps. Philip S. English (R-Pa.) and Benjamin L. Cardin (D-Md.), that would significantly toughen laws against "dumping," or selling imports at unfairly low prices.
The proposal for an international conference, a senior administration official said, is designed to focus attention on practices that may be contributing to the worldwide glut of steel, including government subsidies to steelmakers and protection of home markets.
"It would be to look at production patterns and capacity around the world, and especially non-market factors that may be creating disruptions," the official said. Another senior official cautioned that some cabinet agencies "don't think it's a good idea" to hold a conference.
The initiative and others were met with a guarded reaction from the industry, which isn't sure what the conference would entail. "There may be some areas [among the administration proposals] that have merit, but we're really lacking the details at this point," an industry source said.
Another source said, "We are absolutely delighted that the administration has recognized the true root of the problem," namely, the practices of foreign governments and their impact on steel supply.
"I don't know what the result of a meeting like that would be, but the meeting itself is meaningful to us. The other side of it, though, is it could be a fantastic delay device," because convening a high-level meeting would take months if not years.
It isn't unheard of for international meetings to be held to address an industry's oversupply problems -- such meetings have been held in the shipbuilding and aluminum industries. But while a steel conference might sound like a way to forge a cartel-like deal to curb capacity, trade experts said the outcome is likely to be modest.
"I regard it as a joke," said Gary Hufbauer, a scholar at the Institute for International Economics. "I don't regard it as a threat to free trade. You can get lots of talk that there will be a cartel, but in this industry, with all the suppliers and all the legal barriers [to restraining capacity], you could never negotiate it."
In a related development, Commerce Secretary William Daley indicated that he was concerned over whether the United States and Russia will strike a deal by a Monday deadline to limit Russian steel shipments to the U.S. market. Failure to conclude a pact would trigger the imposition of punishing anti-dumping duties on Russian hot-rolled steel, which could add a serious new strain to U.S.-Russian relations.
Negotiators from the two countries have been haggling in Paris over the terms of the deal. Russia, the hot-rolled steel of which was found by the U.S. Commerce Department to have been dumped at unfairly low prices, is anxious to win a "suspension agreement" that would end the imposition of duties. But the U.S. side is insisting that in exchange, Russia must curb many sorts of steel shipments, not just hot-rolled steel. A similar agreement was reached earlier this week with Brazil.
"The negotiations have been going well, and we've got until Monday to agree to a comprehensive agreement," Daley said. "We think the deal is good for our industry and good for our workers, and it enables the Russians to have a market so it doesn't shut down an industry that represents 7 percent of their [gross domestic product]. But if they don't accept the total deal, there is no deal."