[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[Senate]
[Pages S11971-S11974]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself, Mr. Rockefeller, Mr. Santorum, Mr. 
        Hollings, and Mr. Durbin):
  S. 2580. A bill to amend the Trade Act of 1974, and for other 
purposes; to the Committee on Finance.


                     THE TRADE FAIRNESS ACT OF 1998

  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation responding to the critical steel import crisis 
along with my colleague from West Virginia, Senator Rockefeller, who 
serves with me as co-chairman of the Senate Steel Caucus, Senator 
Hollings, and Senator Santorum. Our bill is entitled the ``Trade 
Fairness Act of 1998'' because it would amend the Trade Act of 1974 to 
remove statutory provisions which put our domestic industry at a 
significant disadvantage compared to their foreign competitors. 
Specifically, this bill makes technical corrections to the so-called 
``Section 201'' provisions of the Trade Act of 1974 to harmonize our 
laws with international laws administered by the World Trade 
Organization.
  While I know it is very late in the 105th legislative session, we 
intend that the introduction of this legislation will demonstrate our 
bipartisan commitment to responding to the current steel import crisis. 
Further, this should send a strong signal to the administration that it 
is high time that we respond.
  Yesterday, Senator John D. Rockefeller, Congressman Ralph Regula and 
Congressman Jim Oberstar, and I met with representatives of the Clinton 
administration, specifically Treasury Secretary Robert Rubin, Commerce 
Secretary William Daley, United States Trade Representative Ambassador 
Charlene Barshefsky and National Economic Council Advisor Gene 
Sperling, to discuss the steel import issue. At that meeting, 
representatives of the Clinton administration assured us that they are 
looking into actions that the administration can take to respond to the 
illegal dumping of foreign steel on the U.S. market but have yet to 
make a final decision on their response.
  While I appreciate their efforts to take a closer look at the 
problem, I am disturbed by the Administration's failure to take 
immediate action up to this time to prevent more cheap steel from 
flooding the American market. I am further disturbed by the fact that 
senior administration officials could

[[Page S11972]]

not give me a specific date or timetable as to when we could expect a 
response from the administration on this crucial and pressing issue.
  The urgency of this crisis and the failure of the administration to 
take action was evident from testimony presented on September 10, 1998, 
where, as Chairman of the Senate Steel Caucus, I joined House Chairman 
Regula in convening a joint meeting of the Senate and House Steel 
Caucuses to hear from executives from the United Steelworkers of 
America and a number of the nation's largest steel manufacturers about 
the current influx of imported steel into the United States. At that 
meeting, I expressed my profound concern regarding the impact on our 
steel companies and Steelworkers of the current financial crises in 
Asia and Russia, which have generated surges in U.S. imports of Asian 
and Russian steel.
  The past three months have been the highest monthly import volumes in 
U.S. history and, with Asia and Russia in economic crisis and with 
other major industrial nations not accepting their fair share of the 
adjustment burden, U.S. steel companies and employees are being damaged 
by this injurious unfair trade.
  The United States has become the dumping ground for foreign steel. 
Russia has become the world's number one steel exporting nation and 
China is now the world's number one steel-producing nation, while 
enormous subsidies to foreign steel producers have continued. In fact, 
the Commerce Department recently revealed that Russia, one of the 
world's least efficient producers, was selling steel plate in the 
United States at more than 50 percent, or $110 per ton, below the 
constructed cost to make steel plate. The dumping of this cheap steel 
on the American market ultimately costs our steel companies in lost 
sales and results in fewer jobs for American workers.
  Specifically, in the first half of 1998, total U.S. steel imports 
were 18.2 million net tons, which is a 12.4 percent increase over 
1997's record level of 16.2 million net tons for the same period. For 
the month of June 1998, total U.S. imports of steel mill products 
totaled over 3.7 million net tons, which is up 39.2 percent from the 
June, 1997 level of 2.6 million net tons. In June 1998, U.S. imports of 
finished steel imports were a record 3 million net tons, a 41.6 percent 
increase over the June 1997 2.1 million net tons.
  Also in the first half of 1998, compared to the same period in 1997, 
steel imports from Japan are up 114 percent, steel imports from Korea 
are up 90 percent, and imports from Indonesia are up 309 percent. Most 
significantly, the U.S. steel industry currently employs 163,000 people 
down from 500,000 people in the 1980's. This situation is untenable for 
the American steelworkers, steel manufacturers, their customers, and 
the American people in general.
  I believe that the growing coalition of steel manufacturers, 
steelworkers, and Congress must work together to remedy this import 
crisis before it is too late and the U.S. steel industry is forced to 
endure an excruciatingly painful economic downturn. The United States 
has many of the tools at its disposal to protect our steel industry 
from unfair and illegally dumped steel; therefore, I submitted Senate 
Concurrent Resolution 121 on September 29, 1998, to call on the 
President to take all necessary measures to respond to the surge of 
steel imports resulting from the Asian and Russian financial crises. 
Specifically, the resolution called on the President to: pursue 
enhanced enforcement of the U.S. trade laws; pursue all tools available 
to ensure that other nations accept a more equitable sharing of these 
steel imports; establish a task force to closely monitor U.S. imports 
of steel; and, report to Congress by January 5, 1999, on a 
comprehensive plan to respond to this surge of steel imports. I am 
pleased to state that as of today's date, twenty-nine of my Senate 
colleagues have joined me in sponsoring this resolution.
  While this resolution is an appropriate way for Congress to express 
our concerns and request immediate actions by the administration to 
respond to the steel import crisis, I think it is also important to 
give the administration all the necessary tools to fight the surges of 
foreign steel. After reviewing the U.S. trade laws with Senator 
Rockefeller, we discovered that our laws regarding safeguard actions 
actually put the United States at a disadvantage in the international 
trade arena. Safeguard actions, or section 201 of the 1974 Trade Act, 
provide a procedure whereby the President has the discretion to grant 
temporary import relief to a domestic industry seriously injured by 
increased imports. Our laws in this area are actually more strict than 
those agreements made during the Uruguay Round negotiations on the 
General Agreement on Tariffs and Trade (GATT). That agreement, which 
the Senate considered and passed on December 1, 1994, established the 
World Trade Organization (WTO) to administer these trade agreements.
  One such trade agreement established rules for the application of 
safeguard measures. The agreement provides that a member of the WTO may 
apply a safeguard measure to a product if the member has determined 
that such product is being imported into its territory in such 
increased quantities, absolute or relative to domestic production, and 
under such conditions as to cause or threaten to cause serious injury 
to the domestic industry that produces like or directly competitive 
products. The comparable U.S. statute, referred to as section 201, goes 
further than this agreement by requiring that foreign imports are the 
substantial cause of the injury. It just does not make sense to hinder 
the administration by placing this additional burden on it in 
evaluating a claim of injury due to surges of imports. We need to level 
the playing field so that all countries are playing by the same rules. 
This oversight is one example of the technical corrections that must be 
made to U.S. trade laws to bring them in line with WTO's rules.
  Specifically, the bill that Senator Rockefeller and I are introducing 
today, the Trade Fairness Act of 1998, makes three technical changes. 
First, it removes the requirement that imports must be a 
``substantial'' cause of the serious injury by deleting the word 
``substantial.'' The WTO's Safeguards Agreement does not require that 
increased imports be a ``substantial'' cause of serious injury. This 
change will lower the threshold to prove that the influx of imports 
were the cause of injury to the affected industry and will make U.S. 
law consistent with the WTO rules.
  Second, the legislation clarifies that the International Trade 
Commission (ITC) shall not attribute to imports injury caused by other 
factors in making a determination that imports are a cause of serious 
injury. This provision will require the ITC to evaluate causation to 
determine which factors are causing injury. If serious injury is being 
caused by increased imports, whether or not other factors are also 
causing injury, safeguard relief is justified. This provision is a more 
faithful implementation of the GATT Agreement and will prevent 
circumstances such as a recession from blocking invocation of Section 
201 by the administration.
  Finally, this legislation brings the definition of ``serious injury'' 
in line with the definition codified in the GATT Agreement. The bill 
strikes the definition of serious injury and replaces it with the WTO's 
language regarding evaluation of whether increased imports have caused 
serious injury to a domestic industry. Specifically, it states ``with 
respect to serious injury'', the ITC should consider ``the rate and 
amount of the increase in imports of the product concerned in absolute 
and relative terms; the share of the domestic market taken by increased 
imports; changes in the levels of sales; production; productivity; 
capacity utilization; profits and losses; and, employment.'' These 
factors are important guidance to the ITC in evaluating a petition of 
serious injury. Again, I think it is appropriate to be consistent with 
the WTO language as America increasingly interacts on a global scale.
  The U.S. steel industry has become a world class industry with a very 
high-quality product. This has been achieved at a great cost: $50 
billion in new investment to restructure and modernize; 40 million tons 
of capacity taken out of the industry; and a work force dramatically 
downsized from 500,000 to 170,000. With these technical changes, the 
Administration will be armed with ammunition to bring a self-initiated 
Section 201 action on behalf

[[Page S11973]]

of the steel industry that has been harmed not only by the onslaught of 
cheap imports on a daily basis but by U.S. law that has prevented swift 
and immediate action by the U.S. government. This legislation is 
essential to allow the President to respond promptly to the current 
steel import crisis. It will allow steel companies to compete in a more 
fair trade environment, preventing bankruptcies that would cause the 
loss of thousands of high-paying jobs in the steel industry. Too many 
steelworkers have lost their jobs due to unfair cheap imports.
  Mr. President, to summarize, I have sought recognition to introduce 
legislation on behalf of Senator Rockefeller, Senator Santorum, Senator 
Hollings and myself, to try to deal with a very serious surge of steel 
imports into the United States, which is threatening to decimate the 
steel industry and take thousands of jobs from American steelworkers in 
a way which is patently unfair and in violation of free trade 
practices.
  It is obvious that the matter is a sensitive one where imports are 
coming from Russia illustratively. The Russians are having enormous 
economic problems, and they are dumping steel in the United States far 
below cost to try to remedy their economic situation. Sympathetic as we 
may be to the problems of the Russians, when they dump, unload steel in 
the United States far under their cost, it violates international trade 
laws and it violates the trade laws of the United States.
  To reiterate our meeting yesterday was one where those of us in 
Congress on the steel caucus asked the administration to take 
administrative action. We have requested a meeting with the President 
for tomorrow before the session ends to try to persuade him to take 
this action. Our requests are not protectionism. They are not 
protectionism because they come within the definition of ``free trade'' 
where our laws are defined consistent with GATT and the World Trade 
Organization to prohibit subsidized goods and dumped goods from coming 
into this country.
  Again, the legislation we are proposing today would remove the 
requirement that imports must be a substantial cause of the serious 
injury and only require that the damages be caused by the imports, by 
striking the word ``substantial,'' which is consistent with GATT, and 
with the World Trade Organization. We have a higher standard than we 
have to. Our laws ought to be changed to eliminate ``substantial 
cause'' to ``cause in fact.''
  Secondly, this bill would change the existing law by not seeking an 
excuse where there are other factors which may result in the imports.
  A third part of the bill changes the definition of ``serious injury'' 
to include a consideration by the International Trade Commission of 
factors such as the rate and amount of increase of imports of the 
product, the market share taken by the increased imports, changes in 
level of sales, profits, losses, production, productivity, capacity, 
utilization, and employment.
  Stated succinctly, what we are seeking to do is to amend existing 
trade laws to conform to international rules of the World Trade 
Organization and GATT so that we may see to it that our own steel 
industry is not victimized by foreign imports and is not victimized by 
standards under our own trade laws, which are tougher and more 
stringent than international trade laws.
  We realize that in introducing this legislation today that it cannot 
be enacted before the end of the session. But we do want to make a 
point with the administration as to where we are heading in the 
future--a resolution which was introduced which has some 29 cosponsors 
in the U.S. Senate.
  The House of Representatives has a similar resolution. There are more 
than 100 cosponsors in the House of Representatives. It is our hope 
that the administration will provide some relief which will be fair, 
equitable, and just.
  In the absence of relief by the administration, then it will be 
necessary for the Congress to move ahead in a more forceful manner.
  I have introduced legislation over the past decade which calls for a 
private right of action, which I believe is the realistic answer, where 
an injured party could go into the Federal court and get injunctive 
relief which would be immediate.
  Under the trade actions which have been filed by the United 
Steelworkers and by quite a number of companies, filed on September 30, 
it is possible under a complicated timetable to grant relief effective 
as of November 20 where duties would be imposed to try to stop this 
flooding and this dumping in U.S. markets.
  In the interim, the President could act, and in the interim, the 
Congress ought to consider ways to amend our trade laws so that we are 
not at a disadvantage in dealing with this very serious problem to our 
steel industry, which is so important for national defense and domestic 
purposes, and so important for the steelworkers themselves where the 
number of steelworkers has declined from some 500,000 to 163,000 at the 
present time.
  It is an urgent matter. The Congress ought to consider it. The 
administration ought to act on it. For these reasons, I urge my 
colleagues to join me in supporting the adoption of legislation to 
bring fairness to our trade laws.
  Mr. ROCKEFELLER. Mr. President, I rise today to introduce legislation 
which will help the President deal with the flood of dirt-cheap steel 
imports from our trading partners. The Section 201 reform bill I am 
proposing with my colleague and Senate steel caucus co-chair, Senator 
Specter, will strengthen the President's ability to help domestic 
industries receive the relief they need and deserve when imports are a 
cause of serious injury.
  Import relief is what the U.S. steel industry desperately needs right 
now. West Virginia steel makers deserve help now, before this crisis 
worsens, as I fear it will. All U.S. steel manufacturers deserve that 
assistance. That's why I am introducing this legislation before 
Congress recesses. I intend to push to improve our ability to remedy 
harm against domestic industries and at the same time remain consistent 
with rules we expect our world trading partners to live by. We can be 
tough and fair on trade at the same time and the bill I am introducing 
today proves it.
  In my state of West Virginia, our two largest steel manufacturers, 
Weirton Steel and Wheeling Pittsburgh Steel have both already begun to 
suffer the effects of the steel import crisis. Weirton has laid off 200 
workers and reports that their fourth quarter earnings and lack of 
pending orders could force the companies to consider additional lay 
offs in the near future. Wheeling Pittsburgh is also worried about the 
affect of the crisis on their bottomline. Laying off workers is never 
easy, but this crisis is forcing such hard decisions. West Virginia 
steel makers are producing world-class products as efficiently as any 
foreign competitors, but when foreign competitors are blatantly dumping 
their product at prices which are sometimes actually below the cost of 
production, it cuts the legs out from under American companies--but 
such unfair practices are absolutely unacceptable. U.S. industry, the 
U.S. steel industry and other industries, deserve just remedies when 
competitors unfairly dump their product on the U.S. market. We want to 
give the President the policy tools he needs to deal with unfair import 
competition.
  Import data tells the story of a worsening steel crisis--the first 
two quarters of 1998 have shown a 27% increase in imports of hot-rolled 
steel. Japanese imports increased by an astounding 114% in that same 
time frame. Steel imports from South Korea increased 90%. There is no 
end in sight. Russia and Brazil are nations who are other prime 
offenders.
  The tragedy of this crisis is that the U.S. steel industry has spent 
over a decade reinventing itself, adjusting and modernizing, in order 
to become a top-notch competitor as we approach the 21st century. This 
industry is a true success story--productivity has shot up and we can 
beat any producer in the world on price and quality when provided with 
a level playing field. For decades, I have worked with leaders in the 
steel industry at Weirton Steel, Wheeling-Pittsburgh, Wheeling-Nisshin, 
and others. I have watched and encouraged these steelmakers and unions 
working together to make the tough, necessary decision to modernize.
  Unfortunately, just as United States steel manufacturers are 
realizing the gains of such investments, they are

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facing a flood of imported steel being sold at rock bottom prices--
again, below the cost of production in some instances. We cannot 
compete against that kind of unfair competition. The legislation 
Senator Specter and I are introducing today will give the President an 
improved tool to ensure that when there is serious injury as a result 
of imports, the U.S. can respond.
  Specifically, our legislation will reform Section 201 which permits 
the President to grant domestic industries import relief in 
circumstances where imports are the substantial cause of serious 
injury.
  Under current law, domestic industries must show that increased 
imports are the ``substantial cause'' of serious injury--which means a 
cause that is important and not less than any other cause. This imposes 
an unfair, higher burden of proof on domestic industries than is 
required to prove injury under World Trade Organization standards. The 
Safeguards Code of the World Trade Organization was established to make 
sure that fair trade did not mean countries had to put up with unfair 
practices. The WTO standard requires only that there be a causal link 
between increased imports and serious injury. I believe that U.S. law 
should not impose a tougher standard for American companies of harm 
than the WTO uses for the international community. Applying the WTO 
standard is responsible and reasonable. In this bill, we propose to 
establish the same standard for the U.S. as is used by the WTO. Free 
trade must mean fair trade.
  In addition, in this bill we also intend to conform U.S. law to the 
standard in the WTO Safeguards Code when considering the overall test 
for judging when there has been serious harm to a domestic industry. We 
clarify that the International Trade Commission (ITC) should review the 
overall condition of the domestic industry in determining the degree of 
that injury by making it clear that it is the effect of the imports on 
the overall state of the industry that counts, not solely the effect on 
any one of the particular criteria used in the evaluation.
  It is our sincere hope that Congress will act on this legislation and 
send the message that the United States will fight for the right of its 
industries to complete on a level playing field in world trade. If 
imports flood our markets, we will act to protect American industries 
against the consequences.
  I am someone who adamantly believes the promotion of free trade is 
essential to our country's continued economic growth. If we are to 
continue to expand the trade base of our economy we need U.S. industry 
to know that we will keep it fair. American industry and American 
workers can deal with fair trade, but they shouldn't be asked to sit 
still for unfair trade practices that hurt workers and their families, 
while robbing the profit-margins of U.S. companies.
  I intend to work in Congress, with my colleagues on the Finance 
Committee and those in the Administration responsible for trade policy 
to give the President better, more effective tools to ensure that our 
country can insist trade be free and fair. Our steel industry, indeed 
all U.S. industries, deserve no less. I will carefully monitor the 
steel import crisis and consider other appropriate actions as we see 
how this situation develops.
                                 ______