Glenbrook steel faces top tariff

By ELLEN READ and AGENCIES

Steel exports from BHP NZ Steel's Glenbrook mill will attract the highest tariff of those announced yesterday by the United States.

But the country's biggest steel manufacturer says it is too early to tell what the pricing effects of the 30 per cent duty will be.

Kirby Adams, the president of BHP Steel, said yesterday that it would take weeks or months for the global steel market to work through the implications of the tariffs.

The Glenbrook mill uses local iron sands and coal to produce 600,000 tonnes of steel a year. Of this, 15 per cent or 80,000 tonnes - worth around $50 million - is exported to the US each year.

The new US duties, designed to aid struggling US steelmakers, range from 30 per cent on flat products such as plate and tin mill products to 8 per cent on imports of stainless steel wire. They take effect on March 20 for three years.

The tariffs fall to 24 per cent the second year and 18 per cent in the third year.

BHP NZ Steel president Cyril Benjamin expressed his disappointment at the announcement but said it was good to finally have a decision.

The Government and the company had lobbied hard to persuade the Bush Administration to include provisions which would have meant most New Zealand exports would have been subject to a quota.

By rejecting this argument and applying the same restrictions to efficient producers such as New Zealand as to others that have avoided reform, the decision would do nothing to contribute to the reform of the global steel industry - ostensibly one of the US' main aims, Benjamin said.

The tariffs would create short- and medium-term challenges for the company and would have a major disruptive impact on the global steel market.

The company planned to seek Government support to explore a World Trade Organisation challenge of the US decision.

Benjamin said BHP NZ Steel was also wary of steel dumping, and would seek Government help in monitoring the levels of steel imports.

The Employers & Manufacturers Association (Northern) says the tariff decision should not surprise, but is the worst response to world steel surpluses. The association's manufacturing services director, Bruce Goldsworthy, said the US had always shown it was willing to protect its own industries regardless of the impact on the rest of the world.

"It sings the praises of free trade but marches to the dirge of protectionism."

The US tariffs exclude members of the North American Free Trade Agreement, including Canada and Mexico, and developing nations, which export a minuscule amount of steel.

The European Union and other US trading partners, including Japan, have threatened to challenge restrictions at the WTO.

The import relief plan fell short of the four-year, 40 per cent across-the-board tariff sought by the US steel industry.