#4
Moscow News
March 27-April 2, 2002
U.S. Concessions Placate Russia
Still, Russia fears losing its niches in steel markets elsewhere in the world owing to the repercussions of U.S. protectionism
By Artur Blinov

The Russian government now feels less disturbed over American protectionist duties on steel imports from this country. The U.S. position on steel imports has been mitigated through bilateral talks, Prime Minister Kasyanov said. Also, the U.S. quota for importing steel slabs from Russia might be increased to the 2000 level and remain on the rise over the next three years, Economic Development and Trade Minister German Gref announced. The U.S. could also make concessions on some types of cold-rolled steel, which it either doesn't produce or produces in insufficient quantities.

However, those U.S. promises merit a second look, for not all of them are as fair as they seem. For instance, Washington initially cancelled the prohibitive quotas of 5.4 million tonnes of steel slabs to offer this niche to Russia and Brazil. That's because American steel rollers themselves badly need the slabs, and not because the U.S wanted to do Russia a good turn.

Meanwhile, there is increasing evidence that the United States' prohibitive tariffs could affect Russian producers' position on markets elsewhere. The dispute threatens to undermine steel markets globally, the Paris-based International Herald Tribune has commented. In addition to sanctions against the United States (extra duties imposed on American goods worth 2.5 billion euros), the paper added, the European Union plans to introduce still another set of duties to protect its industries against the cheap Asian and Latin American steel that has lost its U.S. outlet. The EU sanctions against the U.S. are supposed to take effect as of June 18, while the "duties to protect EU industries" are to be applied in a few days.

It seems that our steel products, or part of them, threaten to fall into the category of "cheap Asian steel" against which the European Union intends to protect itself, as can be inferred from an interview granted by Swiss Trade Minister Leif Pagrotsky to Itar-Tass. He said that the EU would soon announce measures to protect its market, presumably on Monday.

"Russia will not be subject to those measures in areas where it has agreements with the EU; but in other areas Russia will be affected, like other countries," the Swedish minister said in a feeble attempt to put us at ease. We can only hope that Russia had farsightedly included steel trade in its agreements with the EU.

It has to be added that China has already launched an antidumping probe into its own imports of cold-rolled steel. The investigation could affect the products of such large Russian exporters as steel smelter Severstal, and the Magnitogorsky and Novolipetsky metallurgical combines, an Interfax report says.

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