The flow of foreign steel has upset US steel makers

The steel industry had argued in favour of quotas to contain the amount of low-priced steel coming into the country and preserve jobs. But the bill failed already in its early stages, during a vote on a technical measure, as senators approved to restrict the debate on the issue. The steel industry managed to get only 42 senators on its side, 57 voted against. Senate majority leader Trent Lott joined officials of the US government in arguing that the introduction of quotas could violate international trade agreements and cause a trade war. The quota bill would "adversely affect our businesses and farmers who depend upon access to the international market", Mr Lott said.

Not every senator agreed. The chairman of the Senate Finance Committee, William Roth, called the vote "important from the point of our steel industry and important from the standpoint of our American workers". The calls for keeping imports in check date back to the global economic crisis in 1997 and 1998. Then the rise of the US dollar and the decline of currencies like the Japanese yen, Brazil's real and the Russian rouble made it cheap for US consumers to buy steel from these countries. US steel makers, though, have accused forein steel mills of dumping.

Before the vote, hundreds of steel workers had demonstrated outside the US Capitol building, hoping to persuade the senators to root for them. The quota bill would have imposed a maximum level of imports, based on the average levels in the three years before July 1997, when the currency and economic crisis began in Asia. In March, the House of Representatives had passed the bill with a two-thirds majority, but President Bill Clinton threatened his veto should the Senate approve it as well. Earlier this week, US Commerce Secretary William Daley had warned that steel quotas would violate international trade agreements.

Tuesday, June 22, 1999 Published at 20:27 GMT 21:27 UK