The 10 European Community governments agreed in Brussels today to curtail steel sales to the United States, after settling last-minute objections by West Germany that came close to scuttling the deal.
The agreement ended one of the most bitter transatlantic economic disputes in recent times.
Under the terms of the accord, European steelmakers agreed to specific limits on exports of 11 carbon steel products through 1985.
But in steel pipe and tubes -- an area of special interest to U.S. producers because of exceptionally successful European inroads -- the Americans accepted something short of a firm new limit.
Both sides agreed on an exchange of letters saying European steel pipe and tube exports to the United States should be limited to 5.9 percent.
But West Germany received the assurance it demanded Wednesday that this exchange did not mean the ceiling was binding -- that it merely marked a continuation of the consultation process.
Led by West Germany, European producers cornered nearly 11 percent of the American market in steel pipes and tubes last year.
U.S. producers, complaining of unfair subsidies enabling Europeans to outbid them, have been determined to cut Europe's share by about half. But West German manufacturers, whose subsidies are in fact minimal or nonexistent, have strongly resisted.
Settlement of the dispute, which had festered for months, provided a boost to alliance morale at a time of severe strain in U.S.-European relations. The steel controversy, on top of transatlantic differences over the Soviet gas pipeline, East-West trade generally, defense spending and interest-rate levels, threatened to explode into a full-scale economic war.
The U.S. Commerce Department was poised today, if agreement on quotas had not been reached, to impose new duties of up to 26 percent on British, French, Belgian and Italian steel.
The Europeans, meantime, were already speculating about retaliating with restrictions on American agricultural and chemical products.
The trade talks had been further complicated by conflicts among European states over how to distribute the cutbacks in steel exports to America that were being proposed. West Germany was the last holdout, insisting Wednesday that Eurofer--the European steel producers association--first agree on where the cuts would fall.
The dramatic, stubborn stance by the new conservative government of Chancellor Helmut Kohl stunned West Germany's European allies this week.
One senior European diplomat in Bonn speculated today that, precisely because Kohl is new in office and still faces national elections next March, he was not in a position to bargain with his own steel industry in the interest of European unity but had to pass along its unyielding demands to the European Economic Community.
The German steelmakers were in an exceptionally strong bargaining position, since they receive comparatively little financial support from the Bonn government--a point proved again last week when the International Trade Commission threw out cases against seven of eight West German firms that U.S. steelmakers had tried to penalize. Consequently, German firms argued that they should not be required to reduce their exports as much as other European producers.
Ultimately, the Germans got their way at today's emergency meeting in Brussels.