[Congressional Record Volume 149, Number 37 (Friday, March 7, 2003)]
[Extensions of Remarks]
[Pages E403-E404]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE U.S. STEEL INDUSTRY

                                 ______
                                 

                           HON. PHIL ENGLISH

                            of pennsylvania

                    in the house of representatives

                        Thursday, March 6, 2003

  Mr. ENGLISH. Mr. Speaker, Yesterday marked the one year anniversary 
of President Bush's historic stand against unfair steel imports. The 
President's decision to implement safeguard relief for steel products 
exemplifies the perfect case in which this type of trade law remedy was 
created for. Implementing a safeguard action on steel products was 
necessary, appropriate and permissible under both domestic law and our 
obligations within the World Trade Organization context.
  The American steel industry was seriously injured as a result of 
repeated surges of low-priced steel imports that suppressed domestic 
steel prices to unsustainable 20 year lows. The impact of these import 
surges includes 35 American steel companies entering bankruptcy and the 
elimination of over 50,000 American steelworker jobs.
  And yet, the bold safeguard action taken by the Bush Administration 
alone can not rectify the underlying practices leading to the import 
surges which placed the American steel industry in such peril. Make no 
mistake, the domestic steel industry is still very much threatened by 
enormous global market distortions. Massive foreign steel overcapacity 
continues to

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disrupt the global steel trading system--foreign excess raw steelmaking 
capacity has averaged more than twice the level of average domestic 
steel consumption. Foreign governments and steel manufacturers have 
shown little interest in implementing meaningful capacity reduction 
programs. And the inefficient excess foreign steel capacity will 
continue to impose serious pricing pressures in the U.S. market as 
foreign producers attempt to unload their excess capacity whenever an 
opportunity presents itself.
  This is precisely why I applaud President Bush for having the vision 
to implement such a broad and ambitious agenda for correcting the 
distortions in the steel marketplace which have made this threat as 
cyclical as the seasons themselves. Further, I applaud the 
Administration for actively implementing its three-part steel program 
and engaging all steel producing nations at the negotiating table. 
Specifically, the President's three-part plan will: seek the near-term 
elimination of inefficient excess capacity in the steel industry 
worldwide; eliminate the underlying market-distorting subsidies that 
led to the current conditions in the first place; and implementing the 
safeguard action for three years to allow for domestic steel industry 
restructuring and recovery.
  All parts of the President's plan must be implemented in order to 
place our domestic steel producers on a level playing field. The 
domestic steel industry is a national asset and is inseparable from our 
nation's economic, political and military development. But while no one 
disagrees that the American steel industry is an integral component of 
our nation's economic base and critical to our national security, only 
a few voices speak loudly to decry the remedy as unfair to steel 
consumers. Mr. Speaker, I emphatically disagree.
  The tariffs implemented under section 201 resulted from a thorough 
investigation of the facts. The U.S. International Trade Commission 
(ITC) conducted the most exhaustive investigation of its type in 
history. Foreign steel producers employed over thirty-four law firms 
and participated in more than three weeks of public hearings, 
submitting over 85 feet of legal briefs and arguments. Foreign and 
domestic interest groups., including domestic steel consumers, who were 
opposed to any form of relief for the domestic steel industry were 
given every possible opportunity to participate--and they did.
  After this exhaustive investigation, the ITC unanimously found that 
the American steel industry had been seriously injured as a result of 
high levels of low-priced steel imports. Following the unanimous 
decision of injury by the ITC, the President reviewed the Commission's 
findings, considered if a safeguard action would have a greater 
positive effect on the economy than it would negative, and then imposed 
a reasonable set of tariff and tariff-rate-quota measures.
  Mr. Speaker, up to this point I have detailed two separate mechanisms 
which facilitate the specific input of domestic steel consumers. It is 
evident that the facts in this case provide the merit for the 
President's safeguard action, that all interested parties had ample 
opportunity to participate in the investigation, and that, as part of a 
broader plan to reform trade distorting practices in this sector, the 
safeguard action is working without serious negative consequences to 
downstream industries.
  Since the safeguard action was implemented one year ago, there has 
been a modest price recovery on steel products. Keep in mind, however, 
that the price of steel was at unsustainable levels prior to and had 
absolutely no where else to go but up. In fact, even after one year 
with the tariffs in place hot rolled steel prices are still below the 
twenty year average.
  Steel supplies have also been robust since the safeguard action has 
been in place. Contrary to predictions, there is no evidence that the 
safeguard measure has unduly hampered import supply. Indeed, imports of 
flat-rolled steel increased substantially after the imposition of 
section 201 measures in 2002, as compared to the same period in 2001.
  One goal of the safeguard statute is to achieve a period of breathing 
room from unfairly traded imports which allows the affected industry 
time to restructure. Since the safeguard action was implemented, 
domestic producers have enjoyed improvements in revenues, operating 
income, and capacity utilization. A number of companies have returned 
to profitability, while other companies have shown significant 
improvements even though they have not yet become profitable. The 
industry has made significant progress toward restructuring and 
consolidation. While recovery and restructuring will take time, the 
President's plan has allowed the industry to make a real start.
  The crisis in steel is not yet over. It is not enough for Congress to 
look back on the actions already taken by the ITC and the President. 
Instead, Congress must continue to take an active roll, along with the 
President, and look toward completing the initiatives we have already 
begun. The safeguard action was put in place by President Bush for 
three years, declining each year it is in effect. The safeguard action 
must not be cut short and must run its full course. Further, great 
strides must be taken to facilitate a comprehensive and meaningful 
conclusion to the OECD high-level talks on steel.
  Finally, the United States must also maintain and utilize strong 
trade laws which encourage free and fair trade. Over the long term, 
strong and full enforcement of U.S. antidumping and countervailing duty 
laws is the only means to encourage market behavior and deter the 
unfair trade practices that initially led to the steel crisis. These 
laws are critical to the long-term survival of the domestic steel 
industry. It is essential that our trade laws are fully enforced and 
that the Administration defend the integrity of this last line of 
defense against unfairly traded imports in negotiations for new 
international trade agreements.

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