Canada may begin monitoring steelflowing in and out of the country to determine if any steel is
being illegally "trans-shipped" to the U.S., senior government
trade officials said.
    The officials, asking not to be identified, said the
government will investigate an industry contention that steel 
imported from countries such as South Korea and Taiwan is being
diverted to the U.S. and ultimately exasperating concerns about
the level of Canadian exports south of the border.
    But the senior officials, asking not to be indentified,
said that despite intense pressure from the Reagan
Administration, Ottawa was not considering any kind of formal
limits on Canadian shipments to the U.S.
    "In a sense what I hope we are doing is buying some time,"
said one official who claimed Canadian companies were "fair
traders" in the big American market.
    If approved by the Canadian cabinet, the officials said a 
monitoring system will be established in the next three or four
months.
    "I guess if we find trans-shipment is a problem, we would
have to do something about it," said a trade official.
    Canadian steel shipments to the U.S. have risen to 5.7 pct
of the U.S. market in recent months, almost double the level
just two years ago.
    The increase in Canadian shipments comes at a time of
growing anger in the U.S. over rising steel imports from
several countries in the face of a decline among domestic steel
producers.
    Some U.S. lawmakers have proposed Canada's share of the
American market be limited to 2.4 per cent.
    The Ontario Government has urged Ottawa to require foreign
companies to obtain permits to import steel into the country.
Currently, import licences are required only for carbon or raw
steel, which makes up less than half the steel market.
    Canada exported two billion Canadian dlrs worth of steel in
1986, while importing 944-mln dlrs worth of the product in the
same year.
 Reuter
