Glenbrook forges ahead despite US tariffs

By IRENE CHAPPLE

The Glenbrook steel mill will continue with its $27 million upgrade, despite US moves to slap tariffs of up to 40 per cent on steel imports.

The announcement comes in the same week as a New Zealand Institute of Economic Research report, which said the steel industry here would probably need special protection to survive ratification of the Kyoto Protocol.

The Government has yet to decide whether to provide protection.

Glenbrook's revamp is due to be completed early next year, and will shut its smelter for 10 weeks.

The project, announced in May, alleviated fears among the 1300 staff that the mill could be shut by 2005 if it did not meet performance targets.

The strict United States trade barriers were recommended last week by America's International Trade Commission, which suggested tariffs of up to 40 per cent.

President George W. Bush now has two months to decide what level of protection to implement.

Glenbrook owner BHP NZ sent its vice-president of marketing, Mike Gundy, to America last month to lobby against tariffs with the help of the New Zealand Embassy.

However, company president Cyril Benjamin said the decision to implement some sort of tariff had now been made and BHP NZ would lobby for country-specific quotas.

The US imports less than 1 per cent of its steel from New Zealand and ideally, said Mr Benjamin, BHP NZ could get a quota of 80,000 tonnes.

This would barely affect BHP NZ's exports of between 80,000 and 100,000 tonnes to the United States, around 15 per cent of its total capacity.

While the trade protection decision was bad news, said Mr Benjamin, there had been no discussions to cut back on the upgrading project.

It was a concern for the workers, but no more than many other issues.

"There is nothing certain [about the tariffs] yet. The place [Glenbrook] is remarkably calm."

Trade Negotiations Minister Jim Sutton said that the decision to implement the tariffs was disappointing.

The Government believed there was no legitimate basis for import restrictions of any kind on steel imports from New Zealand.

Mr Sutton wants President Bush to ensure that any safeguard remedy focuses on root problems facing the United States steel industry.

He said that once the President had made his decision on tariff levels, trade officials would consult New Zealand steel companies to decide exactly how much the proposed measure might affect New Zealand exporters.