201 Situation:

Powell Goldstein called to clarify what the situation is after several 
misleading trade press articles indicated that the Administration was leaning 
against filing a Section 201 initiation.   The Bottom Line is:  the 
Administration is still very much undecided on how to proceed on a 201 
investigation and even more undecided on which remedy to implement if harm is 
found.   We have learned from Senior level officials they are considering the 
following options:

Option 1: The Administration will initiate a Section 201 investigation on 
steel with an accompanying statement saying that the initiation does not in 
anyway indicate if and what remedy would be implemented.  The threat to an 
Administration investigation, is that quotas are the expected remedy.  By 
taking this approach, the Administration would allow the ITC to determine if 
the imports are trade related or a result of industry market structure, while 
placing a chilling effect on the possible implementation of quotas.   The 
USTR supports this approach; the Department of Treasury has not been persuade 
it is prudent; the  Department of Commerce is trying to negotiate the middle 
ground; and the White House is still undecided.

Option 2:  Allow the Senate Finance Committee to initiate a 201 
investigation, but issue a similar statement indicating no remedy 
commitment.  

Timing: 

The EU-US Summit is meeting the second week of June and this will be on the 
agenda, so do not expect anything before June 14.  The Senate Finance 
Committee is in transition after Sen. Jeffords switched parties and the 
Committees are being reformulated, which could take several weeks.  Look to 
the end of June for a decision by the Administration.  The Administration 
will face pressure to make a decision after the Steel Workers converge on 
Washington next week.  

Remedy:

There has been some confusion about a Multilateral Steel Agreement (MSA) 
being negotiated in place of a 201 investigation.  We have learned that this 
is not going to happen.  The MSA is one of the possible remedies, but the 
Administration has made it clear that it would only be a possible remedy if a 
Sec. 201 investigation is initiated.  An MSA would require voluntary 
restraints negotiated between all steel producing nations.  Another option 
are voluntary restraint agreements (VRAs) which are bilaterally negotiated 
agreements.   The other options are well known:  quotas, tariffs, 
quantitative restrictions, etc.