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Steel VRAs - debate and compromise.

Steel VRAs--Debate and compromise

The battles over steel VRA renewal have begun. In September, the five-years of breathing room that the voluntary restraint agreements gave our steel industry are scheduled to end. Should they be renewed, revised, or repealed? Is it time for steel to go cold turkey and find out if it really is the world's lowest-cost producer, or does it need more time to restructure? If we agree to drop this barrier, will the rest of the steelmaking world agree to play fair? (But what's fair? If we played by our own "fairness" rules, says one wag, there would never again be an after-Christmas sale.)

These are tough questions, and this debate is very important for manufacturing. There are few neutral parties. Most people have strong feelings either for or against VRAs, and a few even have split opinions--"My VRAs are a great idea, but yours are killing me!"

In this two-part series, we are going to look first at the steel VRA situation, and next month, at machine-tool VRAs. We will present opposing points of view on steel VRAs as well as some interesting compromises. The new team in Washington cannot straddle these issues. President George Bush, Commerce Secretary Robert Mosbacher, and U S Trade Representative Carla Hills will soon be making some important decisions affecting everyone in manufacturing. And once you've heard the arguments pro and con, maybe you'd like to share your views with Congress and the new White House team.

What GATT begat

Since the first General Agreement on Tariffs and Trade in 1947, tariffs have been reduced significantly and postwar world trade has grown to the benefit of all. GATT and its trade idealism have been kept alive by free traders contrasting the significant post-war benefits of tariff reduction with the harmful effects of pre-WWII trade wars. The analogy is one of a bicycle--as long as we keep pedaling it, GATT's free-trade philosophy can roll over minor protectionist bumps. But if we stop pedaling, GATT will collapse, and trade wars will return.

In every era, forces of protectionism oppose forces for free trade. Slow and without enforcement teeth, GATT falters when faced with major problems like rapid erosions of key industrial markets like autos and steel. People scream for protection when their jobs are threatened, and their politicians respond--that's just good politics (but bad world economics).

When GATT measures failed to stem the tide of cars and carbon steel into this country, someone came up with the idea of voluntary restraints. Our trading partners, facing unfavorable future unilateral trade legislation and already paying arbitrary unilateral antidumping and countervailing duty assessments, saw little choice but to "volunteer" to restrict shipments to the US. Even though this was a clear violation of GATT ideology, GATT went along with it because it was "voluntary." It offered the clear political benefit of nontransparency, and it was less painful and provocative than traditional tariffs.

VRA allotments are based on quarterly DOC estimates of anticipated US domestic demand. For major countries, their VRA quota gives them X percent of this anticipated market volume. For steel, the grand total of those VRA tonnage percentages, plus specific tonnage agreements with smaller countries, was made equal to 20.2 percent of the total US market. And, remarkably, after an initial delay, it has been held to that.

Bush letter of intent

In his November 4 letter to Senator John Heinz, co-chairman, senate steel caucus, then-presidential-candidate Bush made clear his trade philosophy. He linked the administration's VRAs to steel's recovery, and then cited these problems: "Unfortunately, while the voluntary restraints have clearly had a positive impact on the US industry, we have not at the same time made as much progress toward eliminating market distorting practices. Global overcapacity remains a serious problem, and there is still substantial dumping and subsidizing. The only way to produce a permanent solution to the domestic steel industry's problems is to bring an end to these unfair practices and restore a competitive market in steel.

"One of the key trade policy goals of a Bush Administration will be to achieve an international consensus on eliminating these practices, and, pending that, I can assure you of my intention to continue the voluntary restraint program after Sept 30, 1989."

Mr. Bush also said he would require major steel firms to continue reinvesting cash flows in modernization, and that he would press for opening foreign markets to our steel exports.

To many, his message seemed to be: Read my lips--VRA's are here to stay! But to those opposed to VRA extension, it was a call to intensify their lobbying efforts.

Steel's case for renewal

Bush was well aware of the arguments the steel industry is making for renewal. They have been anticipating this battle for some time and put together a very polished proposal. Here, derived from formal announcements by the American Iron & Steel Institute, is the argument being made today by the steel industry for renewing VRA protection:

1. Steel continues to be unfairly traded--dumped below cost, directly subsidized by governments, and diverted from restricted markets. Our industry is one of the lowest-cost steel producers in the world, but we cannot compete with subsidized high-cost producers.

2. Restructuring is incomplete--costs are huge, debt is high, cash flow low, and meanwhile, some foreign competitor restructuring is being subsidized.

3. Capacity reduction, while significant here, has been slow to nil in subsidized economies, while developing countries continue to add capacity. Our 1987 production was 39 percent less than 1974, compared to reductions of 28 percent in the EC and 16 percent in Japan. The US has also led the EC, Japan, and other major steel supplying nations in employment reduction since 1974.

4. National security demands a healthy domestic industry.

5. In sum, the US steel industry is being held hostage to the steel policies of foreign governments.

In addition, in anticipation of anti-VRA arguments, the steel industry offers these rebuttals:

* VRAs violate the free-trade goals of GATT: The buffer of VRAs is needed to compensate for a world environment where private enterprise cannot succeed based solely on cost competitiveness.

* VRAs cause serious steel shortages: It is unclear that real shortages have occurred, and DOC "short-supply" procedures can correct for shortages that do occur.

* We've protected you for 20 years: Yes, but only partially or ineffectively--the present VRAs had no discernible effect for the first two years. We still need to compensate for the damage done by our too-open markets.

* You made $1 billion profit in 1987 (and expect to make three times that in '88): Over 30 percent of '87 profit was redemption of the investment--tax credit and nonrecurring items. It will take many profitable years to replace the $12 billion we lost in the period of 1982-1986.

* Cheap subsidized steel is a boon for US industry: No other major steel-producing country is taking advantage of dumped steel--they're all net exporters who restrict imports to protect their domestic steel industry. Over the long term, prices would rise if we bacame dependent on imports.

* The weak dollar has solved this problem: Yes, it's helped make us a low-cost producer, but comparative costs do not determine price levels in the world market.

7. Why protect a declining industry: Few countries can produce steel as efficiently as we do, and those that come close do so with government help. Steel's decade of contraction was less a loss of competitiveness than a difference in government policy decisions. The US can't hide behind high tech, we're already losing some of those battles. Our national economic and security interests demand both high tech and basic steel capabilities.

What price, what delivery?

Steel's arguments are pretty valid, but some take exception to their denials that VRAs have caused shortages or price increases. To get a handle on what typical metalformers were paying for specific grades of steel, R Gregory Estell, Government Relations Manager, Precision Metalforming Association, started surveying their members in January, 1988. "Using Jan '87 as a benchmark," he explains, "low-carbon, hot-rolled coils in Oct '88 were up 33 percent, drawing-quality coils up 40 percent, and stainless up 46 percent. About 70 percent of member purchases are small-lot orders from service centers, the rest from mills. Typical order sizes for hot-rolled coils range from 22,000 to 36,500 lb, typically weekly or biweekly buys.

"Individually, metalformers are low-clout buyers, yet when you look at total Us consumption of flat-rolled product and acknowledge that half of it goes through a metalforming company's doors at one point or another, that's a huge market--one fourth of all the steel produced in the US.

"Up until early '87, shortages were an even greater problem than price for metalformers, although lead times have dropped since March '88 as service center inventories climbed. Lead times are now down to 75 percent of what they were in January '87. Yet PMA members experienced the paradox of prices continuing to climb, when with greater availability, they should have dropped! Some of this was due to the panic buying earlier in the year, when people were saying 'I don't care what I have to pay for steel, I have got to have it!' Now, they can get all the steel they want, but they're still paying through the nose! Meanwhile, our PMA members are in a fiercely competitive situation, both domestically and internationally."

So why this unrealistic pricing? "The answer can only be that this is not a truly competitive marketplace," replies Estell.

Your price, my price

Thus, a key question is who's paying what to whom? According to Christopher Plummer, Wharton Econometrics, Philadelphia, "The complicated task of discerning actual steel prices tends to favor steelmakers. A good portion of steel product is sold on a 6- or 12-month contract basis. Spot market prices account for a lot of the sales in commodity-grade steels, and those have soared over the past 18 to 24 months. Some mill products are up over 50 percent.

"With other metals, exact prices, with only minor day-to-day fluctuations, are well known and publicized. Wharton has estimated an average realized price for all steel products sold in '88--what was actually received by the steel companies. For calendar '87, steel products increased 6.5 percent over '86. Currently (December '88) '88's increase is 8.5 percent over '87. The composite ton price for '87 was $480 and is now $521, and we do not expect that to change much.

"Prices have leveled out and we're seeing some softness in some categories and geographic regions. Prices have fallen for hot-rolled sheet, plate, and structural products."

According to Robert Reichard, editor-in-chief, Purchasing World, despite what these composite prices say, "Last year, the big guys weren't hurt at all--some actually paid less than in '87. It was only in late '88 that they accepted 3- to 5-percent increases in contracts they signed for '89. This means prices can't go down with these long-term contracts locking in increases."

Composite '88 steel profit at the five top mills has been estimated at $62/ton, but as of December, individual mill profit per ton was all over the lot. Bethlehem had the best 9-month performance--$80/ton and National was the worst at $10 to $15. What's interesting is that some of the big producers most heavily locked into automotive contracts had the poorest performance.

Why? The auto industry was in the driver's seat in negotiating long-term contracts with the mills that limit future price increases to a few percentage points. The mills needed to lock in markets to justify their long-term investments, so they signed relatively unfavorable, but reliable contracts, hoping to recoup on the spot market.

It can be concluded from this that the little guy pays a premium price even though he and others like him are collectively half the market. Raw material is 40 percent of his costs. He can't pass major steel cost increases on to his customer (particularly the auto industry). And when steel isn't available to him at any price, he suffers from a double whammy. To have this occur when manufacturing was staging a comeback was especially painful.

Short supply?

So far, the short-supply procedure for correcting VRA-induced shortages helps only mills, says Wharton's Plummer. "A common beef is that this procedure only recognizes supply, not price. In some cases, the supply is there, but the price is prohibitive--25 to 35 percent higher than an equivalent import." If buyers scream, the mills can point to this supply and short-circuit any short-supply judgment from DOC.

For the little guy, short-supply procedures are of little hope: his quantities are usually too low, and the time and effort it would take to press for a short-supply judgment unacceptable. Equally unacceptable is the alternative of finding a new source, says PMA's Estell, "Realistically, it takes at least six months to establish a new mill relationship (domestic or foreign) and receive delivery. And, as a new buyer, you would have very low priority--the delay could be much longer." (Of course, you could always violate present just-in-time credos and buy a year's supply from a foreign mill.)

So they usually decide it's cheaper and quicker to turn to service centers and pay premiums--or go without.

PMA arguments against VRAs

Here are the main points PMA is making for dropping VRAs:

1. VRAs give steelmakers monopoly powers over their domestic customers. They limit the ability of steel-user industries--who employ 30 times as many workers--to compete in the global economy.

2. VRAs have increased coil prices from 15 to 30 percent, adversely impacting auto, appliance, and construction-industry raw-material costs.

3. VRAs cause shortages in high-demand periods, nearly doubling lead times, and force users to boost inventories and sacrifice just-in-time programs.

4. VRAs have caused quality problems for metalformers--increased downtime, delays, increased inspection, and forced the use of substandard available materials.

5. VRAs have hurt metalformers growth. Our increased costs, diminished quality, and uncertain deliveries discourage domestic sourcing of metalformed products.

6. VRAs do nothing to discourage increased world over-capacity in steelmaking in non-VRA countries. Such capacity has grown 48 percent in recent years.

7. VRAs encourage unfair trade--they promote downstream dumping of finished metal products in the US market.

8. VRAs take the emphasis off unfair trade practices. By insulating VRA signatories from trade cases, they make unfair trade practices more prevalent.

9. In spite of their limitations, the VRAs have achieved their original goals: Domestic steel is competitive, operating at 90 percent of capacity, imports are down to acceptable levels, and profits are up to three times those of steel's customers. So they should be allowed to expire.

Importer views

The American Institute for Imported Steel (along with two regional importer groups in Texas and on the West Coast) represents the 70 leading steel importers and has always opposed trade restraints. The AIIS organization came into being in the '50s when the government was encouraging steel imports to relieve Korean War shortages. Imports are the obvious buffer against demand surges or strike-induced shortages.

It's no surprise that AIIS champions the cause of steel buyers, and was quick to relate VRA quotas to steel shortages and price increases, reduced manufacturing employment, and reduced potential for exporting steel-intensive products. AIIS opposes the averaging of steel prices because that papers over major shortage-induced price increases in specific product areas. They point out that no president would tax exports, but that has been the effect of the hidden "VRA tax" that exporting manufacturers must pay. They also argue that, from a shipping-cost standpoint, users in the West, Southwest, and South are better served by imported steel than domestic mills in the Great Lakes area.

What price are we paying for steel protection? AIIS recently came up with a $7-billion annual price tag for the cost to users of VRA protection (probably by subtracting steel's lowest pre-VRA price from its highest post-VRA price; i.e., if you had bought low and sold high, you could have made $7 billion last year).

AIIS policy

To summarize the AIIS policy statement:

1. Any renewed restrictions must be for less than five years and have a timetable for phasing them out.

2. Any new restrictions must be voluntary, with any country free to remain outside them if that's in their bess intrests.

3. Products and grades in any such restriction should be those made by more than one US producer and not restrictive in their scope.

4. Any new restrictions should be far more flexible and less arbitrary, with provisions for short supply and product-mix shifting that are responsive to consumer and supplier needs, i.e., able to react to rising demand and regional shortages.

5. The administrating authority must be able to adjust import levels by category without specific requests, but based on steel availability by product category.

6. Technical issues must be addressed, such as theoretical versus actual weights, product coverage (substantial tranformations), circumvention, and economic aspects of short-supply requests.

7. Any exclusions or increases for semi-finished steel must not be at the expense of finished-steel allocations.

8. Of course, any renewed restrictions must require competitive restructuring by the protected industry.

Caterpillar's quest

As a major international competitor who suffered from VRA-induced shortages and the profit-eroding "protection premium" they were forced to pay for steel, Caterpillar Inc has mounted a grass-roots effort to challenge those who favor extending steel VRAs. They are forming a coalition of both large and small manufacturers hurt by VRAs to petition Congress and the President.

Caterpillar's view: "While aware of the steel industry's difficulties, Caterpillar believes that more protection for the US steel industry is unnecessary and carries tremendous costs. By artificially restricting the supply of steel through 1994, quotas will create additional availability problems and provide US steel producers increased leverage to demand higher prices. Caterpillar and its dealers and customers will be forced to pay the price for this protection. As one of the nation's largest steel users and exporters, Caterpillar opposes continuation of steel quotas."

Cat's anti-VRA stance

They support their case with these arguments:

1. Steel quotas hurt user competitiveness. For Caterpillar, steel comprises 20 percent of most product costs. Since January '88, steel prices increased from 8 to 30 percent. Without quotas, this range would probably have been 4 to 8 percent. Shortages have forced them to delay product deliveries, pay 50-percent premiums to service centers, resource parts outside the country at greater cost than they could have made that part themselves, and hurt their investment in just-in-time inventory economies. When they seek short-supply relief, it only takes one mill's offer of steel at significantly higher prices to get their request rejected. Continued protection undermines their commitment to factory modernization, and frustrates their export efforts.

2. The steel industry is now competitive. The weaker dollar and cost reduction make them the world's low-cost producer. Their after-tax profits are twice those of Caterpillar, Deere, and other major unprotected companies.

3. Foreign steel producers are benefiting from the quota-induced "artificial American-price umbrella." The user-paid premium benefits both, that's why foreigners agree to quotas and argue only for increased shares.

4. Legitimate steel-industry concerns can be addressed without quotas. US trade laws can be used to address unfair trade. (Quotas operate outside trade laws.)

5. Quotas do nothing to reduce excess world capacity, sometimes even encouraging expansion. Auto VRAs have acted to increase world capacity by encouraging auto-factory transplants here. Cat would like to see steel trade and overcapacity be made part of current GATT discussions.

6. Quick fixes help one industry at the expense of others. Cat sympathizes with steel's large losses through 1986, but doesn't believe an injured industry is "owed" compensation from its customers or the government (Cat lost $1 billion in 1982-1984).

7. Investment should be made for good competitive reasons, and shouldn't be dependent on government protection from risk. Cat is investing $1 billion over the next five years in factory modernization with no government guarantees. If steel must have government assistance, they should seek direct compensation or government-backed loans that would spread the cost to all tax-payers and not "burden steel users with higher prices and operating inefficiencies."

(For further information on Caterpillar's group, The Coalition of American Steel Using Manufacturers, call Bill Lane, Government Affairs, at Caterpillar 309-675-4162).

Steel service in the center

Because they are caught in the middle between mills and users, the Steel Service Center Institute saw an opportunity to play a mediating role. Last summer, they conducted four extensive Town-Hall-type discussions between members, steel buyers, and steel producers. In a November '88 position statement based on these discussions, SSCI came out in support of extending steel VRAs, conditioned on efforts to make their effects more equitable for both steelmakers and users. They also asked to be included in steel trade-policy consultations as both a representative of service centers and customers using them as a sole source of steel supply, promising to continue to consult with members and users and act as a conduit for their concerns.

Under VRAs, the steel service industry increased market share to 25.9 percent of domestic shipments (up 7.6 percent over 1984), but not all SSCI members prospered, says SSCI president Andrew Sharkey. "Our membership is very ambivalent about VRAs. Our initial survey came back 50-50--as many were hurt by them as helped. Caterpillar, PMA, and others who participated in our Town Hall discussions would have liked us to take a very strong anti-VRA stance, but, as those folks will readily admit, we performed a terrific service by giving them a forum and a chance to address the steel producers directly, at very high levels. And it forced a lot of our customer and industry groups to begin to define their own positions." Based on a CEO survey now in progress, SSCI hopes to offer more specific proposals soon on how to improve short-supply procedures.

The US will continue to have some form of protection, Sharkey feels. The choice isn't between VRAs and nothing at all. "Because of exchange rates, there's not a single Japanese or European mill that can sell product in this market without dumping. So the bottom line is that if the VRAs are not extended, we're going to have a tidal wave of dumping cases."

Caterpillar's Lane disagrees. "How can the domestic steel industry use trade laws to show injury to get antidumping/countervailing duty judgments when they have been showing very impressive profit levels and running flat out for close to two years?"

Is price an issue?

SSCI doesn't feel the government should be involved in discussions of price, says Sharkey. "The issue is availability--allowing flexibility and availability to determine price. The little guy always pays higher prices--that's simply a fact of life.

"After all, the little guy had a very unrealistic situation for five years--steel prices were absurdly low from '81 to '86, and then went to the other end of the specturm. It was the dramatic nature of this change that was the big problem in '87 and '88.

"Quite frankly, a lot of the producers showed a lack of sensitivity to what was happening in the marketplace. We have been hammering them on this, as have PMA and others, and hopefully our message is beginning to get through. What we don't want to happen is warfare between customers and suppliers. That would be crazy! Yet, every day we read about Caterpillar and AISI lobbing shells at each other. And both are losing credibility by distorting reality to promote their cases. As a consequence, people in Washington are beginning to feel they cannot believe either group.

"On the other hand, I feel that SSCI has good credibility--people know we have no vested interest. If we are going to have a system, let's have a system that is sensitive to steel-customer concerns. If not, we're all in trouble. Unfortunately, the mills forget that at times."

Offsetting exports?

Are the domestic mills' new emphasis on export shipments going to hurt domestic users? "No," says SSCI's Sharkey. "Export numbers are small. We'll be lucky to export 2 million tons in '88. This will probably double next year and look like good news, but the Japanese do ten times that. It's like Honda shipping token cars to Japan.

"We aren't opposed to that export tonnage if it is incremental tonnage that allows the mills to run at higher capacity and helps keep their costs down. We do have a problem with it, if in fact, export tonnage grows, and steel is short in this marketplace. If you have a strong world market and can get more for that steel offshore than you can get here, plus by shipping it keep your own market very tight, while enjoying VRA protection, you have incentives to export for your own benefit, to the detriment of the domestic market. So, SSCI may be pushing for some sort of linkage--every ton exported allows one more VRA-limited offshore ton in."

SSCI policy

Here's a summary of the SSCI position statement supporting VRAs:

1. VRAs are less restrictive and disruptive than the alternatives of massive antidumping/countervailing duty investigations or legislated quotas, and the possibility of resulting retaliation by foreign countries against metal-consuming exporters.

2. The reasons for VRAs still exist: foreign-government interference in production, pricing, and marketing, and continued barriers to our steel exports. Without VRAs, steel's competitive disadvantage would prevent it from investing in new technologies.

3. SSCI continues to support strong, competitive steelmaking and consuming industries, and free and fair international trade for all.

4. VRAs have worked better than previous government efforts. They reduced import's market share, they allow imports to rise and fall with consumption, and they burden the unfair (on-VRA) traders with antidumping action.

5. In slack-demand periods. VRAs prevent widespread dumping and firm up the market, preventing falling values for SSCI inventories.

6. The steel industry has performed well under VRAs; investing more than net cash flow, closing marginal facilities, upgrading others, and even starting to build new plants. As a result, they now enjoy higher utilization rates, better yield, greatly improved labor productivity, quality advances, and sharp reductions in total production costs.

7. But the process is incomplete. Foreign competitors have also improved, and our mills must intensify their efforts.

However, SSCI conditions their approval of VRAs by asking for these changes:

1. When demand is tight, VRAs contribute to steep price increases, lengthy lead times, and even unavailability. This is an unwarranted burden on end-users, particularly smaller ones facing stiff foreign competition. Short-supply and other flexibility provisions must be remedied to achieve better balance between producer protection and consumer access to competitively priced steel.

2. The system must be temporary. Permanent protection drives competition further downstream, to the detriment of steel producers, distributors, and end-users alike.

3. We need effective government action to eliminate the root causes of trade distortions. President Bush must go much further than his predecessor who never followed through on his 1984 directive to open discussions on this topic.

VRAs doomed?

Will steel VRAs be dropped this year? PMA's Estell feels the prospects are good, despite the Bush letter favoring them. "Our steel industry is nowhere near the bad shape it was when VRAs were instituted in 1984. Everyone went through a tough time in the '80s. While we sympathize with the steel industry's huge losses, the rest of us didn't do much better then. Sure, we want a strong steel industry--we'd just as soon buy domestic steel--but the bottom line is that it must be competitively priced, good quality, and available.

"PMA cannot see the need for the same program today that was necessary in 1984. Moving to a competitive, free market entails either cutting off VRAs or phasing them out."

Although nearly everyone is for ending unfair trade practices, Estell points out, "There has not been much focus on that in the past four years. George Bush has committed to renewing that process and implementing it. And we have strong hopes he will. If we agree to end VRAs, then he should negotiate with those countries with unfair trade practices to get something in exchange."

VRAs here to stay?

In contrast, Wharton's Plummer says "It's academic to argue about VRAs. They are here, a fact of life, and it appears that they will be extended--that's our forecast. Bush favors extending them. We expect, however, that the countries involved will take harder stances. They may go along with their present share limitations, but in all likelihood will want to shift their product mix to more upscale products to get higher revenues from the same tonnage.

"This could backfire on the domestic steelmakers who are also trying to shift to higher grades. They already have the minimills taking the low-end business, now they may have the imports challenging them on their high-profit products. This is the same situation we have seen in cars--import quantities stay the same, but theire quality moves upscale to avoid the pack of people making commodity-grade products.

"All in all, I feel we will always have some form of protection."

Our conclusions

As 1989 began, economists were predicting a level to slightly higher economy, and no recession until 1990, if then. There are few excesses: inventories are in good shape, prices not going up much, inflation modest, employment stable, etc. Buyers are more computer-aided and sophisticated about controlling inventories.

Because of the softening in steel demand, it may be hrader to rekindle the anti-VRA mood of a year or more ago when quota-induced steel shortages and price gouging were hurting steel users. Emotions have cooled.

The November Canadian-election confirmation of our trade agreement--called a great victory for free traders--was only one battle in a long war. We will have to wait and see how smoothly negotiations on specific tariff reductions go. But it does set a good precedent for other nations, and should help us compete with Europe's coming economic coalition in '92.

On the other hand, the collapse of the GATT trade talks in Montreal in early December suggests that if we cannot agree to reduce simple agricultural subsidies, what hope is there for major reductions soon in industrial areas? If the world's farmers are not ready to make any sacrifices, why should anyone else? Politicians continue to listen to their most vocal constituencies.

There are no saints in international trade. There are still too many countries subsidizing excees steel capacity. Whether a government, through taxes, directly subsidizes an industry, or through trade agreements effectively taxes the people through higher consumer prices, the result is the same: people pay to protect an uncompetitive industry.

This cannot continue. The huge costs involved and increasing competitive pressures will force a more economic solution. Maybe we can eventually wind down the world's trade wars just like we're winding down the threat of nuclear war, as people realize these have become "unaffordable luxuries."

What can you do about all this? Surely, you have a viewpoint. Why not share it with someone involved in the trade process. Tell them whether you want to continue VRAs or phase them out. Maybe you can suggest some modifications, or something completely new. It's your job, your industry, and your country.

So speak up! You don't have to be president of Bethlehem Steel or Caterpillar Inc to be heard. If you feel strongly, talk to your legislators or write President Bush.

Machine-tool VRAs next

Next month, we will look at the more recent VRAs for the machine-tool industry, and how they contrast with those for steel.
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Title Annotation:voluntary restraint agreements
Publication:Tooling & Production
Date:Feb 1, 1989
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