Is everything ok with steel war now?

The steel controversy, which was caused in March with the decision of the American administration to increase tariffs on imported steel, seems to be going down. However, this does not mean that the interested parties found a compromise. There is nothing of the kind. The countries-exporters are simply trying to talk to the USA separately. Russia is not an exception.

On April 15-16 Russian Minister for Economic Development and Trade, German Gref visited the USA. The goal of the visit was known before: to discuss the situation with the deliveries of the Russian steel to the USA.

Gref had to interact not only with American officials, but also with businessmen. One of the results of the talks was the fact that they promised to cancel Jackson-Vanik’s amendment, which was passed in 1974, imposing sanctions against the trade with the Soviet Union. The amendment was approved on the ground that the USSR was violating the rights of the national minorities, in particular, the Jews. Nowadays this amendment is absurd, because there is no discrimination against Jews in Russia now, and no one stops you, if you want to go to Israel. But the amendment is still in effect, and the promise, which was given to the Russian minister, does not at all mean that it would be cancelled indeed.

As far as the major goal of the visit is concerned – the talks pertaining to the deliveries of the Russian steel to the American market – the experts were rather pessimistic about the shots for achieving a compromising decision. The USA is not ready to make an exception for the Russian metallurgists. The American government still insists that the restrictions did not touch upon slabs - half-finished steel product.

German Gref announced after the talks with the US Secretary of Commerce Donald Evans, that Russia was pulling out from the steel sales agreement, which was signed in 1999. The agreement set quotas on the import of certain kinds of steel products from Russia to the USA. It was also said that the deliveries of the Russian steel to the USA would be increased. The increase of Russian quotas will touch upon the cool rolled metal and steel plates, as well as the part of the market, where the new American tariffs increased just a little. Now Russia’s share to deliver slabs to the American market is supposed to make up 25%.

Other countries are closing their markets too, so this agreement is surely a very good one. But the increase of quotas will touch upon cheap steel production, whereas the new American tariffs are valid for other, more expensive products.

So was German Gref’s visit to the USA successful? Speaking about the maximum – it was not. The USA did not agree to make concessions to Russia on the entire steel issue. But on the other hand, Russian enterprises do not depend on the American market that much. In this connection, the upcoming steel conference in Paris is a lot more important for Russia (the conference is to open on April 18), since there is a danger that the introduction of the increased tariffs on steel might take an epidemic character.

The “steel war” showed very explicitly that all the talks about the globalization look like theoretical considerations. Even the leader of the liberal economy – the USA – could not resist the temptation to support its non-competitive producers.

Oleg Artyukov PRAVDA.Ru

Translated by Dmitry Sudakov

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