Redirected steel to hit Poland

Polish steel exports to the United States are exempt from the tariffs announced by President George W. Bush, U.S. officials said last week. But Polish steel makers are concerned that producers barred from the U.S. market will try to sell their products in Poland, putting pressure on an industry struggling to restructure while competing against imports. The package of temporary safeguards for the U.S. steel industry will impose tariffs of 8-30% on imports of different steel products from countries in the European Union (EU), Japan, Russia, Ukraine and elsewhere for three years starting March 20. The Americans exempted Poland and other developing countries that export less than 3% of total U.S. steel imports and are members of the World Trade Organization (WTO), according to information published by the U.S. Trade Representative's Office. But the resulting increase in supply on the global steel market will drive down steel prices and increase steel imports, reducing revenues from Poland's domestic production, industry officials said last week.

"Steel producers who exported to the U.S. market will now aim for Europe," said Czesław Skowronek, vice president of Polish steel mill Huta Tadeusza Sendzimira (HTS). "Since Poland is a large country and a large consumer of steel, these products will make their way onto our market. This is highly disconcerting as imports of steel products have grown at a galloping pace since 1999." He added that HTS, which posted losses of zł. 405 million ($96.4 million) last year, was not technologically equipped to compete with the major steel producers whose products will be locked out of the U.S. market. "The volume of steel products imported to the U.S. in 2001 was 43 million tons," said Karol Lipowczan, vice president of the Metallurgical Chamber of Industry and Commerce (HIPH). "The U.S. tariffs are so high that they will effectively close the U.S. market to half of these products." Poland's steel imports have grown from 2.5 million tons in 2000 to nearly 3 million tons in 2001, or nearly 45% of domestic demand, contributing to the decline of the Polish steel industry, he said. "The majority of these products could have been produced by Polish steel mills," Lipowczan said. "As a result, the overcapacity of Polish mills keeps growing, increasing their unit costs and worsening their financial standing."

Steel industry officials pointed to the EU's measures to curb growing imports of surplus steel created by the U.S. tariffs, announced by EU trade commissioner Pascal Lamy last week, as an example of the protective measures they would like to see adopted by the Polish government. The EU plans to track the origin, volume and prices of imports in particular product categories, enabling it to prevent import growth. "We should begin to protect ourselves against excessive, unjustified imports," Skowronek said. "I am not saying that we should not import ... but not as much as 50% of our steel …" But according to the office of Andrzej Szarawarski, secretary of state at the Economy Ministry, the government is not planning to introduce tariffs to stem the growth of imports.