[Editorial] US`s Protection of Steel Industry is Unfair

The US President George W. Bush asked the International Trade Commission (ITC) to review the necessity of the `safeguard` action. His decision to protect the US steel industry is anticipated to create severe disturbances in the world steel market. The `safequard` action under 201 section of the US trade law is finally determined by the president through the investigation of the ITC. In this case, the decision will be made at the end of this year.

Bush`s decision derived from the consecutive bankruptcies of the US major steel companies such as the LTV steel Co.

The ITC will investigate the illegality of the 15 steel exporting countries such as Korea, the EU, Japan, and Brazil. Because this investigation will be achieved by the president`s direct order, it is highly plausible to suggest the government to take a safeguard measure.

However, from our perspective, Bush`s decision is unfair. President Bush told that his decision is the countermeasure to the unfair trade practices in the world steel market. But the bankruptcies in the US steel industry have derived not from the unfair trade practices of the foreign companies, but from the loss of the competitiveness of the US steelmakers. Hence, the criticism has already been raised in the international society that the US is trying to pass over the cost for the restructuring of the steel industry to the other countries.

Furthermore, in case that the US takes a restriction measure on steel imports, there will obviously be the disturbances in the world steel market. If he US will chase its own interest self-righteously, it could no longer be a leading country of the world.

With the market share of 7 percent, Korea is included in the major steel exporting countries with the EU, Canada, Mexico, and Japan. Korea exported to the US the steel products of 2.4 million ton (about $0.98 billion). But because Korea was already restricted to export 14 steel products, additional restriction will have devastating impact on the Korean steel industry. The Korean steelmakers forecasted that the steel exports will decrease by 40 percent.

The government should notify to the US government the actual situation of the Korean steel industry, and the unfairness of the steel imports restriction by strengthening the trade negotiation with the US. And the government have to establish the joint countermeasures with Japan, the EU etc, such as filing a lawsuit to the WTO.