[Congressional Record Volume 145, Number 78 (Thursday, May 27, 1999)]
[Senate]
[Pages S6443-S6444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      SECTION 201 TRADE ACTION FILED BY THE DOMESTIC LAMB INDUSTRY

 Mr. CRAIG. Mr. President, during the last 2 weeks, we have 
been hearing from our colleagues concerned about the lamb industry in 
the United States and the Section 201 trade action filed by them. I 
would like to join them in commenting on the situation and dispel some 
myths and confusion surrounding the Section 201 trade action filed by a 
coalition representing the domestic lamb industry.
  The case now lies before the President, and I urge him to impose 
strong, effective restrictions that will curb the devastating surge of 
imports that has swamped the domestic lamb market and now threatens to 
drown an entire industry.
  Some worry the nations of Australia and New Zealand may retaliate 
against the United States if we take action to protect our domestic 
industries. They won't because they can't--not for at least three 
years. That is because of the laws that govern the Section 201 case--
laws that, let me be clear about this, are and have been a part of 
every single trade treaty this nation has signed since the Trade Act of 
1974. That means all signatories to GATT also signed onto the Section 
201 provisions.
  Importers say they have not done anything unfair. The U.S. lamb 
industry never said they had. Frankly, the Section 201 rules don't 
pertain to unfair trading. It is never alleged, never argued, never 
considered. The only things that matter in a Section 201 case are 
whether imports have risen drastically over the recent time period.
  There is also the question of harm. A section 201 case is a lot 
tougher to prove than dumping, or subsidies, or yes, unfair trading. 
The domestic industry is required to prove that imports are a 
``substantial cause'' of significant injury or threat of significant 
injury.
  You will hear arguments from importers about how their actions aren't 
to blame. About how their price undercutting, their deliberate decision 
to swamp the market with cheap, imported product, in the face of ample 
notice of the harm being done, isn't to blame for the financial ruin 
now snaking its way through the domestic lamb industry.
  The International Trade Commission heard those arguments. They heard 
all about the Wool Act, about the coyotes, about grazing fees and 
organization. They heard it all, and those six Commissioners rejected 
those arguments. They rejected them when the Commission unanimously 
ruled that imports threaten the domestic lamb industry with irreparable 
harm. After that ruling, those arguments by importers are not a factor 
in this case.
  You will also hear talk of cooperation. Of how the New Zealand and 
Australian industries want to work with the domestic industry. Let me 
ask you, why are we hearing about cooperation now? Where was the 
importers' cooperation when fourth-generation ranches faced bankruptcy? 
When processors were losing accounts left and right to cheap imports? 
When the leaders of the domestic industry publicly announced their 
intention to file the Section 201 trade case?

[[Page S6444]]

  Nowhere, is the answer. As the domestic industry reeled under the 
unrelenting wave of cheap, imported lamb, the importers have been busy 
breaking records. Month after month in 1998, the imports flooded the 
domestic market, shattering records. When it ended, a record-making 
70.2 million pounds of imported lamb had saturated the American market. 
But the importers are not finished yet. Even as the ITC conducted 
hearings, the level of imports were rising--in the first three months 
of 1999 alone, imports are up nine percent over 1998 levels, and an 
astonishing 34 percent above 1997 levels. If this pace keeps up, the 
record-making import levels of 1998 will be shattered, as will domestic 
sheep industry.
  I urge the President to curb this devastating surge of cheap imports. 
The domestic industry won a fairly fought legal case governed by laws 
embedded in this nation's trade treaties. To do anything less than 
ordering strong, effective trade restrictions would signal to 
industries in the United States and abroad that our laws will not be 
enforced.
  As I said before, the case now lies before the President. I urge him 
to act on the unanimous recommendation by the International Trade 
Commission for four full years of trade restrictions. This follows 
ITC's unanimous conclusion that the domestic lamb industry is seriously 
threatened by the deluge of imports that has swamped the U.S. 
marketplace and now absorbs one-third of all American lamb consumption.
  The six Commissioners were unanimous in their recommendation for 
trade restriction, but offered three options on how it should be 
applied. The ITC's options range from a straight quota to a straight 
tariff to a tariff-rate quota.
  The importers have already identified the one ITC recommendation 
which would do nothing to stop their already disastrous effect on the 
marketplace. A report of an interview with Australian Trade Minister 
Tim Fischer identified the ITC's tariff-rate quota as likely to have 
``minimal effect on present Australian exports.''
  Minimal effect. Esteemed colleagues, we did not create the 201 
provision in our trade laws to have ``minimal effect.'' We did not 
create a provision that is tougher to prove that dumping, than unfair 
trading. We created the 201 provision as a just way for a domestic 
industry that has been injured or threatened by imports to turn to its 
government for help.
  The ITC offered three recommendations. The U.S. lamb industry has 
studied those recommendations and found the ``common ground'' among 
them.
  The industry needs strong, effective relief. Here is what they are 
asking for:
  A two-tier, four year tariff rate quota program with tariffs both 
below and above a set level of imports. In year one, tariffs would be 
22 percent on lamb meat imports up to 52 million pounds, with a 42 
percent tariff on imported lamb beyond the 52 million pound mark.
  Year two calls for a 20 percent tariff up to 56 million pounds, and a 
37.5 percent tariff above the 56 million.
  Year three involves a 15 percent tariff up to 61 million pounds and a 
30 percent tariff above the 61 million pounds.
  Year four, the final year, calls for a 10 percent below-quota tariff 
up to 70 million pounds and an above quota tariff 20 percent above the 
70 million pounds.
  I join my colleagues in urging the President to order this request 
into action. It provides desperately needed, strong, effective relief 
to both curb this unprecedented, record-breaking, surge of imports and 
the devastating price undercutting that accompanies it.
  This case is important for this nation's agriculture community. It's 
being watched throughout our rural towns, farms and ranches. If the 
President does not implement an effective remedy for the lamb industry, 
which has followed our laws and proved its case, an unmistakable signal 
would be sent to agriculture and rural interests throughout the United 
States.

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