Despite a running battle, both steelmakers and steel importers are hailing last week's passage of the General Agreement on Tariffs and Trade (GATT), the massive trade pact approved by Congress last week.
However, both sides say they may try to fine-tune the enabling legislation.
The 124-nation trade agreement cuts tariffs by an average of 38 percent worldwide, and for the first time extends GATT rules to such new areas as reduction of trade-distorting agriculture subsidies, lowering trade barriers in service industries such as banking and clamping down on copyright piracy.
It also creates a more powerful World Trade Organization to referee trade disputes and eliminates the one-country veto that a losing nation could use to block an adverse ruling.
Supporters generally argued that the U.S. economy would be stimulated by freer worldwide markets, while opponents charged that U.S. industry and jobs would be hurt by a flood of imports and that the WTO would infringe on the sovereignty of the United States.
As the wrangling over GATT intensified during the last several months, domestic steelmakers and importers had been jockeying to get various provisions included or cut from the 20,000-page bill.
In the end, each side got half a loaf.
"We believe that the passage of the GATT enabling legislation by Congress will be good for our country, our customers, and our company," said Curtis H. "Hank" Barnette, the chairman and chief executive officer of Bethlehem Steel Corp., in a prepared statement. "We believe that the GATT implementing legislation preserves effective U.S. trade laws, which domestic steel producers must rely on to deal with injurious, unfair steel imports," he said.
Bethlehem a leading player
Bethlehem Steel, which owns the Sparrows Point steel mill in Baltimore County, has been a leading player in trying to ensure that provisions designed to bolster the domestic industry were included.
But one industry observer, who asked not to be named, said the steel industry failed in getting some provisions into the final legislation.
One that failed would have diverted the payment of duties assessed in unfair trade cases from the U.S. Treasury to a fund that would reimburse the companies that bring the trade cases.
But despite such setbacks, the steel industry welcomed the new pact.
"On balance, it is quite favorable," said Andrew G. Sharkey III, president and chief executive officer of the American Iron and Steel Institute, the trade group for large steelmakers. "It will open up export markets for our customers."
Yet, he left the door open on future legislative action. "I think that issue is still open right now," he said, declining to specify what issues that might involve.
In the other camp, representatives of steel importers say GATT will help their constituents by lowering barriers to international trade. But they will fight for legislation to counter new provisions in the GATT legislation that make it easier for steel companies to mount and win trade cases.
"These protectionist provisions will prevent international trade competition when demand declines and further massive trade case filings occur," said Horst E. Buelte, president of the American Institute for International Steel Inc., said in a speech in New York on Monday. "They must be repealed to prevent injury to the U.S. economy," he said
Changes aid steel companies
While saying GATT "will launch a new era of global expansion," Mr. Buelte said half-a-dozen rule changes in the the bill will favor steel companies in trade cases.
One such item deletes the automatic removal, or "sun-setting," of punitive duties. Instead, foreign steel companies would have to prove the offending practices have stopped and will not start again.
Other provisions make it easier to prove U.S. steel companies are harmed by foreign competition and would boost punitive duties.
But Mr. Buelte does not expect problems to materialize for steel importers until 1996, when steel demand might decline and American companies begin to mount trade cases.
Business has been booming this year for U.S. steel mills, which have been working at full capacity.
Steel companies have sold 7 percent more steel tonnage in the first nine months than for the same period last year. More importantly, the companies have been able to make price increases stick -- something they hadn't been able to do for several years.
Ironically, steel imports have skyrocketed by 62.7 percent in the same period to 21.7 million tons, driven by U.S. demand that cannot be meet by domestic producers. In fact, the U.S. steelmakers themselves have been importing raw steel to keep up with customer orders.
Beyond the issue of specific trade rules, GATT is expected to help American steel companies as their customers are given greater access to world markets, according to two analysts for the management consulting division of Deloitte & Touche, a national accounting firm.
"Exports, which have been one of the problems of our trade balance, are going to pick up fairly dramatically," said Michael J. Fradette, national director of manufacturing for the division. "And I think steel, which is one of those basic building blocks for any product, will benefit directly from it," he said.
The steel industry is also in better shape to take advantage of the wider markets because of the years of downsizing and capital improvements that have cut the cost of making steel to about half of that in Europe, according to Reynold W. Mooney, national director for the steel industry for Deloitte's consulting division.
"They are better equipped to compete than they have been in a long time," he said.
The fight over the GATT legislation came more than a year after Bethlehem and other steelmakers suffered a regulatory setback. federal trade board struck down half of the cases brought by the companies in a massive "dumping" case involving $3.2 billion worth of steel imports from 20 countries.
The cases were the last of a string of efforts to stem the tide of foreign imports, which the steel industry blames for much of its woes in the 1980s and early 1990s. The steel industry charged that foreign competitors received government subsidies and then sold the steel below the cost of production in the U.S. market.