Failure to extend the Voluntary Restraint Agreements limiting steel imports would pose a grave threat to Geneva Steel's plans to modernize and become a major supplier, said Joseph A. Cannon, chairman of the Utah steel company.

Speaking Thursday before the House Steel Caucus, Cannon said the agreements have "reduced import penetration in the U.S. steel market from 25.9 percent in 1984 to 21.4 percent in 1987 . . . This decrease has taken nearly three years to achieve, but it has permitted the U.S. steel industry the opportunity to rationalize and to return to profitability for the first time since 1982."But he says the steel program continues to be plagued by weaknesses. "Steel prices today in the U.S. are only 80 percent, in real terms, of their 1982 levels, and the industry still feels the devastating effect of $12 billion in losses from 1982 to 1986," he said.

"The modernization process of the U.S. steel industry has begun, but it is by no means complete," Cannon said.

The Voluntary Restraint Agreements are due to expire in September 1989.

"Reconstituted mills, such as Geneva and Gulf States, are just getting under way and are vulnerable to imports," he said. "A decision not to extend the VRAs will undo the results of the 1984 Steel Program.