Bethlehem Steel Chief Testifies About
Trade Laws and Impact on Steel Industry
For Immediate Release
Public Relations Division
Public Affairs Department
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WASHINGTON, D.C., February 25, 1999 -- Stating that the domestic steel industry and the nation are at a trade policy crossroads, the chairman and chief executive officer of Bethlehem Steel Corporation today called upon the Clinton Administration to "effectively and comprehensively use the remedies available to it under current law" and upon Congress "to make changes in our laws where they have proven to be deficient."
Testifying before the Trade Subcommittee of the U.S. House of Representatives' Committee on Ways and Means, Curtis "Hank" Barnette said that despite the industry's remarkable success in becoming a low-cost, high-quality and world-class competitor, "there continues to be significant foreign overcapacity, which has to land somewhere, and it had landed in the United States, the world's most open market. We are the 'world's steel dumping ground.' Our foreign competitors did not make the painful decisions made by the American industry."
The world's oversupply crisis, which has been made worse by major structural economic failures in Asia and the Commonwealth of Independent States (CIS), has led many nations to export unneeded steel production to the United States, causing domestic companies to lay off thousands of employees, lose hundreds of millions of dollars in revenues as a result of eroding prices and has prompted bankruptcy filings. The unprecedented import levels recorded in 1998 accounted for 30 percent of apparent domestic consumption. Finished steel imports were, from 1997 levels, up 144 percent from key Asian producers and up 72 percent from Russia and two other nations of the CIS.
"Perhaps most troubling of all," Mr. Barnette testified, "is that the serious import injury this time is destroying an American success story of industrial revitalization, an industry that is once again the world leader. Major structural economic failures abroad injure a world-class, highly competitive American steel industry -- and, with it, thousands of highly skilled U.S. jobs," he said.
Twelve steel companies and the United Steelworkers of America took action in the fall by filing trade cases against Japan, Russia and Brazil for the unfair trading of hot-rolled steel. Those cases have proceeded through the International Trade Commission and the U.S. Department of Commerce, which have confirmed that their imports are in violation of U.S. trade laws by margins of unfair trade from 25 percent to over 200 percent. However, concerning Russia, "we do not believe that the settlement agreement, if entered into, will meet the statutory criteria of being in the public interest and preventing the suppression and undercutting of prices for steel produced in American plants by American workers. We have requested the Department of Commerce and the Administration to reconsider this decision. The industry and the union also filed new antidumping petitions and countervailing duty petitions covering cut-to-length plate against the Czech Republic, France, India, Indonesia, Italy, Japan, Macedonia and South Korea on February 16, 1999.
Commenting on the Clinton Administration's Steel Plan announced on January 7, 1999, Mr. Barnette said, "The judgement from all quarters of industry and labor is that the plan falls short of what is required, and that has been communicated to the Administration.
Citing effective trade laws as fundamental to ensuring fair trade, Bethlehem's chairman recommended the 106th Congress consider the following eight areas:
Section 201 should be amended to reflect the standards in the WTO Safeguards Agreement rather than the more restrictive standards currently in effect.
ITC injury analysis in antidumping and countervailing duty cases should be amended to allow for offsetting duties whenever the domestic industry is injured by unfairly traded imports.
Significant and unnecessary loopholes in the current law applying to antidumping calculations must be closed.
Change of ownership of a subsidized operation, including privatization, should have no effect on the calculation of countervailing duties.
Section 301 effectiveness must be reinforced because of the proliferation of new and harder-to-reach foreign trade barriers. The U.S. Trade Representative should have the authority to act directly against foreign firms that participate in, or are the principal beneficiaries of, such restraints.
Legislation, as proposed by Congressman Ralph Regula and others, is needed to implement a steel import notification system that will provide "real time" data.
A commission established by Congress, composed of federal judges, should review adverse WTO dispute settlement panel decisions. Enactment of such a proposal, previously introduced by Senator Daniel Moynihan and former Senator Bob Dole and endorsed by the Clinton Administration, would prevent U.S. officials from being intimidated by the prospect of WTO litigation.
Trade cases brought and won by American industry and its employees can only be settled with their approval.
"The challenge is clear and real. Prompt, comprehensive and effective action to address the steel import crisis is absolutely essential if we are to continue our present trade policy," Mr. Barnette concluded.