[Congressional Record Volume 145, Number 9 (Wednesday, January 20, 1999)]
[Senate]
[Pages S765-S766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself, Mr. Rockefeller, Mr. Byrd, Mr. 
        DeWine, Mr. Hollings, Mr. Santorum, Ms. Mikulski, Mr. Sarbanes, 
        Mr. Hutchinson, Mr. Durbin, Mr. Kohl, Mr. Sessions, and Mr. 
        Moynihan):
  S. 261. A bill to amend the Trade Act of 1974, and for other 
purposes; to the Committee on Finance.


                     the trade fairness act of 1999

  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation 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. My bill is entitled the ``Trade Fairness Act of 1999'' 
because it would bring our laws in line with those established by the 
General Agreement on Tarriffs and provide relief to the flood of 
foreign steel imports dumped onto the American market.
  On Monday, November 30, 1998, Senator Rockefeller and I convened a 
hearing of the Senate Steel Caucus to look further into the continued 
dumping of foreign steel on the U.S. market and its affect on domestic 
producers. At that hearing, Hank Barnette, Chairman and CEO of 
Bethlehem Steel, and George Becker, President of the United 
Steelworkers of America, testified to the magnitude of the crisis, the 
continued loss of high-paying jobs and the alarming lack of capital 
investment by the industry over the last several months. They both 
expressed frustration at the lack of activity by the Clinton 
Administration to respond to illegal dumping of foreign steel.
  On October 7, 1998, 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 were looking into actions that the Administration could take 
to respond to the illegal dumping of foreign steel on the U.S. market 
but had yet to make a final decision on their response.
  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 members of the United Steelworkers of America and 
executives from 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 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 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, the October 1998 import level was the second highest 
monthly total ever, with 4.1 million net tons--an increase of 56 
percent over October 1997 of 2.6 million net tons. Only August 1998 
(4.4 million net tons) surpassed it. The October level, if annualized, 
would exceed 49 million net tons, or 48 percent of expected total U.S. 
domestic steel shipments for the entire year. Total imports in October 
were 35 percent of apparent consumption, up from 23 percent a year 
earlier.
  Imports of steel from various countries have dramatically increased 
when the first six months of 1997 are compared to the first six months 
of 1998. The percent increases from four countries are as follows: 
Japan, 141 percent; South Africa, 124 percent; South Korea, 96 percent; 
Russia, 29 percent.

  The following is an example of the layoffs and plant slowdowns since 
September, 1998:
  Geneva Steel has laid off 460 workers;
  U.S. Steel's Philadelphia operations have been reduced by 70 percent;
  LTV Steel's plant closure has cost 320 jobs; and,
  Weirton Steel has suffered 300 layoffs with 200 additional layoffs 
expected by January 1, 1999.
  The American Iron and Steel Institute estimates that 5,000 
steelworkers, nationwide, have been laid off since September, 1998. An 
additional 10,000 U.S. steelworkers' jobs are at risk of imminent 
layoffs.
  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 introduced 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. I 
am pleased to state that the resolution passed both houses of Congress 
on October 19, 1998. Unfortunately, the President's report to Congress 
failed to take the immediate action needed to stop the importation of 
foreign steel.
  While this resolution was 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, I discovered that 
our trade laws place the United States at a disadvantage in the 
international trade arena. Our laws are 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.
  The GATT 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 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 injured by increased imports. Our statute goes further than 
GATT 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.
  For these reasons and to provide relief to the domestic steel 
industry injured by these overly strict laws, I am

[[Page S766]]

introducing the Trade Fairness Act of 1999, which seeks to: lower the 
threshold for establishing injury in safeguard actions under Section 
201 of the 1974 Trade Act; and, establish an import monitoring program 
to monitor the influx of foreign steel on the U.S. market.
  During the last days of the 105th Congress, I introduced the Trade 
Fairness Act of 1998 which sought to amend the Trade Act of 1974 by 
making technical corrections to our strict laws; the first section of 
the legislation I am introducing today is based on that bill. First, 
regarding safeguard actions, this legislation 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 by 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 clarifies that there only needs to be a causal 
link between the imports and the injury in order to gain relief. This 
clarification 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.

  Next, my legislation establishes a comprehensive steel import permit 
and monitoring program, which is modeled on similar systems currently 
in use in Canada and Mexico. The program created by this legislation 
requires importers to provide information regarding country of origin, 
quantity, value and Harmonized Tariff Schedule number. The program also 
requires the Administration to release the data collected to the public 
in aggregate form on an expedited basis. The information provided by 
the licensing program will allow the Commerce Department and the steel 
industry to monitor the influx of steel imports into the United States. 
Currently, unfairly traded imports can cause significant damage to the 
U.S. market long before the data is available for even preliminary 
analysis. This program will allow the U.S. government to receive and 
analyze critical data in a more timely manner and, as a result, allow 
the industry to determine more quickly whether unfairly traded imports 
are disrupting the market.
  Specifically, the bill directs the Secretary of Commerce and the 
Secretary of Treasury to implement a steel import monitoring program 
that requires importers of all products classified within Chapters 72 
and 73 of the Harmonized Tariff Schedule of the United States (HTSUS) 
to obtain an import permit prior to entering such products in the 
United States. In order to obtain an import permit, the importer is 
required to submit an import permit application containing specific 
information. An import permit is issued automatically upon receipt of 
the application and is valid for a period of thirty days.
  This legislation will enhance U.S. law to better respond to surges of 
foreign imports that injure U.S. industries. It is important to note 
that, with the exception of the steel import licensing provisions, this 
legislation applies to all industries and is not limited to the steel 
industry. As such, other U.S. industries that are faced with an import 
crisis such as the steel industry is currently confronting would also 
benefit from these improvements to the U.S. trade laws.
  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 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. I intend to stand up for the steel industry 
and prevent the loss of any more jobs.
  For these reasons, I urge my colleagues to join me in supporting 
adoption of legislation to bring fairness to our trade laws and needed 
relief to the steel industry.
  Mr. SESSIONS. Mr. President, I rise today to join my colleagues in 
introducing the ``Trade Fairness Act of 1999'' and thank Senator 
Specter for his hard work in crafting this legislation which will help 
alleviate the economic turmoil in our domestic steel industry caused by 
illegal dumping.
  Recent trade data indicates that steel imports to the United States 
for the first ten months of 1998, ending in October, have reached an 
all time record of 34,628,000 tons. In contrast, imports to the United 
States in for the first ten months of 1997, which was itself a record 
year, equaled 26,708,000 tons. This represents a 30 percent increase.
  The bill I am joining in cosponsoring with Senator Specter today will 
help make it easier for the President to enforce our existing trade 
laws in two ways; it will lower the threshold necessary for the 
President to take immediate action to stem the tide of illegal imports 
under section 201 of the Trade Act of 1974 and it will create an 
``Import Monitoring Program'' for steel, similar to the systems in 
place in both Mexico and Canada, to identify the country of origin, 
value and quantity of steel imports into the United States.
  These actions are in line with the General Agreement on Tarriffs and 
Trade (GATT) and will not hinder free trade with our international 
trading partners. The bill will provide necessary information, critical 
in determining whether illegal trade practices are occurring. This 
provision will ensure the President can take immediate, decisive action 
when those practices are identified.
  The men and women who work in the United States steel business are 
the most efficient and hardest working people in the world. Given a 
fair shake, our domestic steel producers have and can continue to 
compete with any of our international trading partners. Illegal dumping 
has forced America's steel industry into jeopardy. The jobs of 
thousands of steel workers in my home state of Alabama and across the 
Nation are threatened. Our steel workers and companies deserve the 
protection afforded to them by United States trade law and the rigorous 
enforcement of those laws by our President.
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