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Public Papers - 1989

Memorandum on Steel Imports and Exports


Memorandum for the United States Trade Representative

Subject: Steel Trade Liberalization Program

I have decided to establish a two and one-half year Steel Trade Liberalization Program and hereby direct the United States Trade Representative (USTR) to begin immediately its implementation. The program is designed to phase out in a responsible and orderly manner the voluntary restraint arrangements (VRAs) that currently limit steel imports into the U.S. market, and to negotiate an international consensus to remove unfair trade practices.

The Steel Trade Liberalization Program shall include the following elements:

1. Transitional Voluntary Restraint Arrangements. The USTR shall negotiate extensions of VRAs for a transitional period of two and one-half years. During this period, the overall ceiling on imports from VRA countries will be increased at an annual rate of one percentage point. This increase will be allocated to countries that undertake and abide by acceptable multilateral or bilateral disciplines with respect to unfair trade practices and market access. The allocation of this one-percentage-point annual increase may be delayed, if necessary, as leverage to achieve acceptable disciplines.

2. International Consensus. The United States Trade Representative shall seek to negotiate an international consensus to provide for both fair and open trade in steel. This consensus, which should be pursued through the Uruguay Round of Multilateral Trade Negotiations and complementary bilateral agreements, will provide effective disciplines over trade-distorting subsidies, as well as reductions in tariff and non-tariff barriers to international steel trade.

3. Expiration Date. The voluntary restraint arrangements will be terminated no later than March 31, 1992. Thereafter, U.S. steel producers will rely on domestic trade laws to remedy foreign trade-distorting practices.

4. Legislation. The Administration will support the extension of existing legislation to make such transitional voluntary restraint arrangements enforceable at our borders, as well as to encourage continued industry modernization and worker retraining.

5. Impact on Steel Users. The USTR shall implement the program in a way that recognizes the legitimate concerns of U.S. steel consumers. In particular, the existing short supply mechanism will be liberalized and streamlined.

6. Enforcement. The Department of Commerce shall continue to enforce rigorously our unfair trade laws to prevent injurious dumping and subsidization.

7. Monitoring. The United States International Trade Commission will be asked to continue to monitor the efforts of the steel industry to adjust and modernize, and to prepare an annual report for the President on those efforts.

The Steel Trade Liberalization Program described above is designed to establish the conditions for fair and open steel trade throughout the world, so that steel can be produced and traded on the basis of market forces, rather than governmental aid and intervention.

The USTR shall coordinate and implement this program in consultation with the appropriate Economic Policy Council agencies.

George Bush

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