UPDATE ON THE STEEL TRIGGER PRICE MECHANISM AND PROBABILITY OF STEEL COMPANY UNFAIR TRADE COMPLAINTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001700080018-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 20, 2016
• Document Release Date: April 26, 2007
• Sequence Number: 18
• Content Type: MEMO

49R001700080018-2
THE SECRETARY OF COMMERCE
Ws its D.#. 252341
M ORAUD i ieaabexs '-of the Cabinet ^ouncil on Co erce ans Tra8e
--' From: Malcolm Baldrige-,.. Chairman Pro Tempore
Cabinet Council on Commerce and Trade
Subject: Update on the Steel Trigger Price Mechanism and Probability
of Steel Company Unfair Trade Complaints
ACTION FORCING EVENT: Probability that U.S. steel producers will
file a large number of unfair trade complaints.
STATF..MEN? OF -ISSUE: _. The major" domes ti c_--steel companies are likely
to file antidumping and countervailing duty complaints shortly
involving more than- half- of- the-.steel--that.-the:-United States imports.
from several. countries,,----including seven of the European Communities
(EC) member states.
ANALYSIS: Since the last CCCT review of the steel issue, in November
1981, steel imports have continued at high levels, especially from
the European Communities, and many producers have openly flouted .the
steel trigger price mechanism (TPM); consequently, the confidence of
the U.S..-steel--industry --.in. the_.-.TPM. -has been.-:eroding. In early
December, chief executive officers of several steel firms met with
the President--to discuss their-concerns, and they promised him they
would withhold-their petitions until we could consult with the
European Communities.
Since then, I., and other officials of the Department of Commerce,
have held extensive consultations with representatives of the U.S.
industry, the European Communities, and other foreign governments.
We have urged all to abide by the guidelines of the TPM. The
Communities' response has failed to convince the American industry
that the TPM can continue to be an effective means of enforcing U.S.
trade laws. Thus, it now seems likely that the U.S. steel industry
in the very near future-will file a large number of antidumping and
countervailing duty cases against awide range of foreign producers
and steel products.
The U.S. industry can be expected to state that these producers
have, with injurious effect on the U.S. industry, been selling large
quantities of steel at less than fair value or with the benefit of
foreign government subsidies in violation of'U.S. trade laws and
international agreements. The U.S. industry feels that it lacks any
meaningful alternative to the filing of steel cases. At the same
time, producers in the European Communities also face difficult
choices. : World demand for steel is down ---and. European unemployment
is high.
 --Approved For Release 2007104/217 :-CTA ROP84B00049R00'1700080018-2
The Department-has made it clear that it would maintain *he?'TPM -IM -
its present form only so -long as it is in the interest of an parties
and all parties seek to abide by its conditions. During the. first
half of this year the system appeared to serve the interest of all
parties. -Beginning in August, however, .- high . import levels .have . - = . .
triggered-doubts -as to the TPM' z viability. -- Nonetheless, the
Department has sought -to maintain the integrity of the PPM.= - Where . - _-
we have had evidence -of injurious dumping or subsidization, we . ave -
:. :
initiated-investigations.
To date -we -have initiated ten antidumping or countervailing4uty '- -
investigations and-have conducted examination of ten impoot?zurz v --
In addition, we have strengthened monitoring procedures covering
related-party transactions and are conducting a dozen related-party
audits. The Department of Commerce has pursued this enforcement' '-- '
program vigorously, -. including an appearance . by--Under Secretary -Olm.r
before the International Trade Cosmaission (ITC) --as it opened its - ? - -
consideration of whether injury to the U.S. industry has been caused
by unfair-imports of steel. The ITC has made an affirmative
preliminary determination of injury - or-threat of injury in all--of
.the cases-brought -to- i t- In November-bar =the --Department.
The filing of petitions by the domestic industry would: be a statement
that the TPH in its present . form is not working effectively. In as
much as the TPM was instituted as an "alternative to" and "not a .
supplement for' trade cases, the logic behind the system,,* as well as
the administrative burdens it imposes, could well require the
discontinuance-of the TPM in its present form-if =- the if-S.- industry -
files cases.
If the industry does file complaints, it is likely that th+e
countries-subject to the investigations will bring pressure for a
resolution-favorable to their interests. The investigations will be
conducted according -to D.S. laws and regulations. (consistent with
international agreements to which we are a party) , which -prescribe a
highly structured process that includes s-a procedure of settlement
short- of =-imposition _-of -:additional -duti es The Department is ready -
and able to -process--the -cases expeditiously-, and will continue to
consult with--the D.S. industry -and -foreign governments.--