NZ lodges steel protest, Aussies win exemption

By ELLEN READ

The Government has started a formal protest against United States steel duties but is unlikely to gain the same exemption granted to Australia.

New Zealand and Australia have lodged a request with the World Trade Organisation for consultations with the United States over the tariffs.

The Australian tariff exemption came after a US steel mill lobbied the Bush Administration.

The mill argued it would go under without the supply of 250,000 tonnes a year of feedstock hot roll coil from BHP Steel (Australia). It could not secure a supply from other US west coast mills as they were competitors.

The US agreed to spare about 85 per cent of Australian steel exports.

New Zealand exports about $60 million of finished steel to the United States, almost all from the Glenbrook mill owned by BHP NZ Steel.

As finished product, the Glenbrook steel is not eligible for the exemption.

BHP NZ Steel marketing vice-president Mike Gundy said his company was reviewing its options for appeal and talking to US customers about whether they would support an exemption request.

He said it would be several months before the company knew the full impact of the tariffs.

A spokeswoman for Trade Minister Jim Sutton said the US Administration had been in touch with the minister - who is in China - telling him it was unfortunate New Zealand had been caught up in the tariffs as it had not contributed to the problems in the United States steel industry.

Prime Minister Helen Clark has said she will raise the issue at her meeting with President George W. Bush on March 26.

The new duties, designed to aid struggling US steelmakers, range from an 8 per cent tariff on imports of stainless-steel wire to 30 per cent on plate and tin mill products.

They take effect next Wednesday for three years.

BHP NZ Steel manufactures hot rolled steel sheet and coil, cold rolled steel sheet and coil, and a range of pipe and hollow sections.

Exports from its Glenbrook mill will attract the highest tariff.

About 15 per cent of the mill's annual output, or 80,000 tonnes - worth around $60 million - is exported to the United States.