Ukraine's steel industry may face U.S. restrictions

WASHINGTON - President George W. Bush on June 5 announced his intent to pursue restrictions on foreign steel imports into the United States, the New York Times reported. Although no substantive action has been taken as yet, the move could prove a blow to Russian and Ukrainian steel exporters, among others, who are often able to sell products more cheaply than their American counterparts.

The Bush administration plans to submit a request to the U.S. International Trade Commission (ITC) for a Section 201 probe as outlined in the 1974 Trade Act. For President Bush to impose the desired restrictions, the ITC would need to concur that foreign imports have indeed been detrimental to the American steel industry. In that case, Reuters explained, he would be allowed to enact restrictions lasting up to four years.

Severe foreign economic troubles came to a head in 1998, resulting in a glut of inexpensive steel on the market. Since late 1997, 18 American steel manufacturers have declared bankruptcy. According to President Bush, the problem stems from "foreign government intervention in the market and direct financial support of their steel industries."

Pursuant to the 1974 Trade Act, the Bush administration is not required to demonstrate to the ITC that illegal or improper foreign action has contributed to American troubles.

Even in the event that the ITC sides with Mr. Bush, the nature and extent of possible American protectionism remain uncertain. The administration has not yet worked out the specifics of a possible proposal.

Furthermore, American import restrictions will likely face opposition at the World Trade Organization. European Union Trade Commissioner Pascal Lamy complained, "The cost of restructuring the U.S. steel sector should not be shifted onto the rest of the world."

Copyright © The Ukrainian Weekly, June 10, 2001, No. 23, Vol. LXIX

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