[Congressional Record Volume 145, Number 8 (Tuesday, January 19, 1999)]
[Senate]
[Pages S328-S329]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE TRADE FAIRNESS ACT OF 1999

  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. I introduce this legislation with 
the full knowledge that there are many actions required to respond to 
the steel import crisis that is corroding the United States' steel 
industry's ability to compete. This crisis is hurting our steelworkers 
and our companies. It must be dealt with as a top priority in the 106th 
Congress.
  The bill I am introducing today deals with two important aspects of 
this crisis: monitoring imports and remedying injury to domestic 
industries under our trade laws. The bill has two main parts. The first 
section reforms Section 201 of the Trade Act of 1974 to conform its 
standard of injury to that of our world trading partners. This reform 
will affect all products which are covered by Section 201 by revising 
the U.S. standard for injury to the standard used in the World Trade 
Organization's Safeguards Code. The second section of the bill will 
help us better track steel imports by requiring an import permit for 
steel and establishing a monitoring program. This will allow us to 
track steel imports, as many of our trading partners currently have the 
ability to do. It will provide import data in a more timely fashion and 
help us better anticipate future import problems. I am proposing the 
``Trade Fairness Act of 1999'' along with my colleague and Senate Steel 
Caucus co-chair, Senator Specter, in order to strengthen the 
President's ability to help domestic industries receive the relief they 
need and deserve when imports are a cause of serious injury, and so we 
know what when significant amounts of foreign steel are entering our 
country.
  Import relief is what the U.S. steel industry desperately needs right 
now. This bill contains provisions that will help us more effectively 
deal with future import problems, but it will not provide the immediate 
assistance that our steel industry needs to survive this crisis. Within 
a matter of days, we will have the steel import data from the end of 
last quarter. I fully expect it will show that the United States is 
still enduring an unprecedented level of steel imports. I also strongly 
believe that most of those imports continue to be sold at historically 
low prices; prices which are below the cost of actual production in 
many instances. American steel manufacturers cannot fight this unfair 
trade practice without help. West Virginia and other major steel makers 
deserve help now, before it is too late. This measure addresses some of 
the structural reforms needed to deal with import surges in the future, 
but, again, I have to admit it won't do what's needed to stop the flood 
of steel imports. I firmly believe that a 201 action is what is 
required, now, to stop the imports. I have strenuously made that case 
to the Administration, and will continue to make that case to the 
President and his advisors, as well as my colleagues on the Finance 
Committee, and in the Congress. I am also likely to submit other 
legislative remedies to deal with the emergency which faces the United 
States' steel industry and its workers.
  This legislation I am introducing today includes reforms we need to 
improve the way U.S. trade laws function in a crisis. The import 
licensing will help the steel industry specifically, but the Section 
201 reforms will ultimately benefit all products where foreign 
competitors have dumped their product on the American market. I intend 
to push these provisions during the Finance Committee's consideration 
of trade legislation in the 106th Congress. The 201 reforms will 
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 been hit hard by the 
steel import crisis. Weirton alone has laid off over 900 workers and 
there is the possibility that their fourth quarter earnings and order 
book could force these two companies to consider additional lay offs in 
the near future. Wheeling-Pittsburgh is also worried about the effect 
of the crisis on their bottom-line. Laying off workers is never easy, 
but this crisis is forcing hard decisions. West Virginia steel makers 
are producing world-class products as efficiently as any foreign 
competitor, but when foreign competitors are blatantly dumping their 
product at prices which are sometimes actually below the cost of 
production,

[[Page S329]]

it cuts the legs out from under American companies. 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 other prime offenders. A trade case 
is pending against the imports of hot-rolled steel from Russia, Brazil 
and Japan. The Commerce Department made a determination of critical 
circumstances in regard to that case. More cases are expected.
  The real 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 encourage 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 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 both allow us to more efficiently track steel 
imports and 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, the legislation I introduce today with Senator Specter 
will reform Section 201 of our trade law and require import licensing 
for steel which is classified under Chapters 72 or 73 of the Harmonized 
Tariff Schedule of the United States.
  Let me lay each of the bill's two major provisions in a little more 
detail.
  First, Section 201, which this legislation will strengthen, 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.
  Many of our trade partners, like Canada and Mexico, have more modern 
systems to track imports than we do in the United States. This 
legislation addresses that problem and provides us with better and more 
timely data on imports. Explicitly, this legislation requires that 
within 30 days of the enactment of this legislation, that the Secretary 
of Commerce, in consultation with the Secretary of the Treasury, will 
establish an import permit and monitoring program which applies to any 
one importing a product under chapter 72 or 73 of the Harmonized Tariff 
Schedule of the United States that is initially entered into a bonded 
warehouse or foreign trade zone. Steel import permits will be required 
before the merchandise is entered into the customs territory of the 
United States. These permits will be valid for 30 days. The data 
collected from this permit program will be compiled in aggregate form 
and be made publicly available on a weekly basis and posted on an 
Internet site. The Administration already proposed releasing import 
data earlier and publicly as part of its January, 1999, report to 
Congress on steel. This legislation will complement that proposal. The 
Secretary of Commerce will be able to impose reasonable fees to defray 
the costs of this program.
  It is our sincere hope that Congress will enact this legislation as 
part of trade legislation that moves in the 106th Congress. Passage of 
this legislation will send the message that the United States will 
fight for the right of its industries to compete 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 the 106th 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. But this legislation alone 
will not remedy the steel crisis our country faces. Rest assured, I 
will continue to carefully review my legislative options and take other 
appropriate actions in the near future to help fight this important 
crisis.

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