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Enron Mail |
201 Situation:
Powell Goldstein called to clarify what the situation is after several misleading trade press articles indicated that the Administration was leaning against filing a Section 201 initiation. The Bottom Line is: the Administration is still very much undecided on how to proceed on a 201 investigation and even more undecided on which remedy to implement if harm is found. We have learned from Senior level officials they are considering the following options: Option 1: The Administration will initiate a Section 201 investigation on steel with an accompanying statement saying that the initiation does not in anyway indicate if and what remedy would be implemented. The threat to an Administration investigation, is that quotas are the expected remedy. By taking this approach, the Administration would allow the ITC to determine if the imports are trade related or a result of industry market structure, while placing a chilling effect on the possible implementation of quotas. The USTR supports this approach; the Department of Treasury has not been persuade it is prudent; the Department of Commerce is trying to negotiate the middle ground; and the White House is still undecided. Option 2: Allow the Senate Finance Committee to initiate a 201 investigation, but issue a similar statement indicating no remedy commitment. Timing: The EU-US Summit is meeting the second week of June and this will be on the agenda, so do not expect anything before June 14. The Senate Finance Committee is in transition after Sen. Jeffords switched parties and the Committees are being reformulated, which could take several weeks. Look to the end of June for a decision by the Administration. The Administration will face pressure to make a decision after the Steel Workers converge on Washington next week. Remedy: There has been some confusion about a Multilateral Steel Agreement (MSA) being negotiated in place of a 201 investigation. We have learned that this is not going to happen. The MSA is one of the possible remedies, but the Administration has made it clear that it would only be a possible remedy if a Sec. 201 investigation is initiated. An MSA would require voluntary restraints negotiated between all steel producing nations. Another option are voluntary restraint agreements (VRAs) which are bilaterally negotiated agreements. The other options are well known: quotas, tariffs, quantitative restrictions, etc.
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