A DECADE ago, uncontrolled steel imports triggered a catastrophic collapse of earnings, production capacity, and employment in the nation's steel industry.The industry is now worried about the possibility of the events of those days being repeated. This time, however, experts are saying that the threat of trade turmoil comes with an opportunity for the world to take a big step closer to truly fair trade in a product that has long been wrapped in the politics and the bare-knuckled export practices of the nations that produce it. "There's a real chance for a lasting peace for the first time in decades. All that's needed is a healthy portion of good will," says Peter Brabach, director of the American Institute for Imported Steel, an organization of steel importers and exporters based in Washington. The question is whether the world's steel-trading nations have the will to forge an agreement at talks now under way in Geneva, says Jeffrey Carr, a Washington trade attorney and consultant. The issues are coming to a head because the United States system of steel import restraints expires next March 31. That seven-year-old collection of bilateral deals, called Voluntary Restraint Agreements (VRAs), has given the US its longest period of steel-trade tranquillity in the last quarter century. The VRAs limit foreign steel to less than 20 percent of the US market, thus protecting corporate profits and steel workers' jobs. President Bush has said he will not extend the VRAs, but to compensate for dismantling the quotas, the administration is trying to negotiate one major agreement among 30 nations represented in the talks in Geneva. A number of developments have occurred in the world steel industry in the last decade that favor a multilateral agreement, analysts say. For example, fewer foreign steel companies are now owned by governments, which often provide subsidies that reduce prices and make their exports illegal under US trade law, notes a recent report by the US International Trade Commission (ITC). France, Britain, Mexico, Brazil, and other countries have sold national steel producers to private investors or are moving toward privatization. With the exception of the former Soviet-bloc countries, steelmaking nations have closed many older plants, greatly easing the oversupply of steel that led to brutal price-cutting in the early 1980s, the ITC found. US producers are more competitive because they have lowered production costs and improved quality. Also, the value of the dollar compared with the Japanese yen, the German mark, and other currencies, has shifted so as to make American metal cheaper and imports more expensive. "If you assume you have a fair trade environment, US steelmakers should be able to compete fairly successfully," says Christopher Plummer of the WEFA Group, economic consultants. But conditions working against a multilateral agreement are formidable. Many of the nations negotiating in Geneva want major US concessions, including more-liberal trade laws, exemptions allowing some subsidies to continue, and a stretch-out of up to 10 years for some of the proposed free-trade rules. "It's not going to happen," says Nicholas Tolerico, Washington representative for LTV Steel Corporation, the third-largest US producer. As a Commerce Department official in the 1980s, he helped negotiate the VRAs. European nations also do not want to give up their trade laws as backup protection to a multilateral agreement, Mr. Carr says. A further complication is the ongoing Uruguay Round of trade negotiations under the General Agreement on Tariffs and Trade, a multilateral organization that sets rules for most international trade. Participating nations fear a multilateral steel agreement could set unwanted precedents for a GATT agreement next year. Without an extension of the VRAs and without a multilateral agreement, American steel producers say they'll file trade cases. Carr and others say US steel producers, whose exports have surged since 1986, could themselves be accused of dumping, that is, selling overseas at prices lower than at home. In any case, retaliation would be expected. No one expects that a steel trade war would wreak the same level of hardship on today's smaller work force or the same level of financial distress on today's leaner steel companies. Nonetheless, the US industry says it will defend its market. "The chances in 1992 for the gloves to come off are pretty high," says Robert Varah, head of sales for Dofasco, Canada's largest steelmaker. Says Mr. Plummer: "On the surface, the evidence looks fairly compelling ... that we will return to the environment of the early '80s" with an onslaught of imports and a raft of antidumping and subsidy cases by US producers and retaliatory measures by other countries. American steelmakers have already accused 23 producers from six nations of dumping pipe on the US market. The complaint, naming Mexico, Korea, Taiwan, Romania, Venezuela, and Brazil, was the first major case against VRA signatories. It frees those nations to withdraw from the quota agreements, although none has.