The Clinton administration reached an agreement with Russia yesterday to limit steel shipments to the United States for five years, averting more drastic restrictions on Russian steel that were scheduled to take effect under an anti-dumping ruling.
The agreement, which eased a potentially severe source of conflict with Moscow, was negotiated in Paris by Commerce Department officials. But in a move underscoring the political sensitivity of the steel issue, Vice President Gore announced the accord at the start of a two-day campaign swing in the Midwest, and in Washington, Commerce Secretary William Daley issued a statement hailing Gore's role as "critical."
"We have just had a breakthrough in the negotiations related to steel imports," Gore told several hundred supporters on a tarmac in Omaha, disclosing that he had just concluded a phone call on his plane with Russian Prime Minister Sergei Stepashin. Gore aides asserted that a call by the vice president to Stepashin on Monday night broke an impasse in the Paris negotiations just before a midnight deadline.
The deal is the latest move by the administration aimed at two conflicting goals -- satisfying the U.S. steel industry's demands for protection from a surge of cheap imports, and preserving some access to the U.S. market for Russia and other strategically important countries that have been hit by economic crises. The White House has drawn harsh criticism from the steel industry and its unions for putting too much weight on helping the crisis-stricken countries, a potential problem for Gore's presidential campaign.
In the case of Russia, the deal -- similar to one reached last week with Brazil -- essentially offers a trade-off: Moscow gets a reprieve from the imposition of punitive anti-dumping duties on its hot-rolled steel, a key product used in automobiles and other goods. The duties were to be imposed pursuant to a complaint by U.S. steel companies that hot-rolled steel from Russia, Brazil and Japan was being dumped, or sold at unfairly low prices in the U.S. market.
In return, Russia agreed to curb shipments of many kinds of steel. It can't export any hot-rolled steel to the United States this year, and thereafter shipments will rise gradually to a high of 725,000 metric tons in 2003, an 80 percent reduction from 1998 levels. Shipments of cold-rolled steel will be cut back to 50 percent of 1998 levels. Semifinished steel, galvanized steel and other products also will be limited.
Most major U.S. steel companies prefer to let dumping duties be imposed without "suspension" agreements of this type, and several companies -- including U.S. Steel Group and Bethlehem Steel Corp. -- issued a statement complaining that the administration's approach "undermines the effectiveness and credibility of U.S. trade laws."
The United Steelworkers of America union was less critical. "What one could say about the Russian deal is that it goes to a comprehensive agreement with Russia, which is a good thing, but what we need is a comprehensive agreement [to limit imports] with the entire world," said William Klinefelter, the union's Washington representative.
Staff writer Ceci Connolly, traveling with the Gore campaign, contributed to this report.