[Congressional Record Volume 151, Number 14 (Thursday, February 10, 2005)]
[Extensions of Remarks]
[Pages E215-E216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INTRODUCTION OF RESOLUTION

                                 ______
                                 

                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                      Thursday, February 10, 2005

  Mr. KNOLLENBERG. Mr. Speaker, a strong domestic manufacturing base is 
vital to our country's national defense and economic security. Because 
of massive global competition, and costs that manufacturers cannot 
directly control, manufacturing in the United States is under great 
stress. In order to improve the economic environment in America for 
manufacturers, we have to address the issues that make our companies 
less globally competitive. These issues include lawsuit abuse, rising 
health care costs, energy policy, tax reform, and fighting against 
criminal counterfeiters. But in order to provide an environment where 
our manufacturers can effectively compete in the global market, we must 
address the distortions in the U.S. market for steel. Today I am 
introducing a resolution that seeks to address unnecessary distortion.
  There are currently 188 antidumping and countervailing duty (AD/CVD) 
orders in place on various types of steel, which is well over

[[Page E216]]

half of all AD/CVD orders in existence. Many of them have been in place 
since the early 1990s. Some still serve a purpose, others do not. The 
ones that don't are distorting the U.S. market for steel and 
unnecessarily damaging steel consuming companies in the form of 
decreased availability, reduced quality, delayed deliveries, and higher 
prices. In fact, U.S. companies suffer from artificially high steel 
prices, higher than anywhere else in the world, making them globally 
less competitive. For example, the January 2005 price of hot-rolled 
steel in the United States was $695/ton, on the world spot market $575/
ton, and in China $510/ton. Five auto parts companies have recently 
filed for Chapter 11 bankruptcy, citing artificially high prices for 
steel as a significant reason.
  The Department of Commerce (DoC) and International Trade Commission 
(ITC) are required by law to conduct 5-year ``sunset reviews'' of anti-
dumping and countervailing duty (AD/CVD) orders to determine whether to 
terminate, suspend, or continue the duties beyond the 5 years they have 
already been in place. In particular, on March 2, 2005 the ITC will 
conduct a sunset review hearing on hot-rolled steel products from 
Brazil, Japan, and Russia (Invs. 701-TA-384 and 731-TA-806-808 
(Review)). And on April 26, 2005 the ITC will conduct a sunset review 
hearing on stainless steel sheet and strip from France, Germany, Italy, 
Japan, Korea, Mexico, Taiwan, and the United Kingdom (Invs. 701-TA-380-
382 and 731-TA-797-804 (Review)). Today I am introducing a resolution 
that urges the DoC and ITC to consider, and report on, the impact of 
the AD/CVD orders on domestic steel-consuming companies and the overall 
economy when conducting sunset reviews of duties on steel products.
  The DoC and ITC have the discretion to take into account the impact 
of these duties on steel consumers, and they should. But traditionally 
they have not. If this continues, economic decisions will be made 
without seeing the full effects of those decisions. This is not wise, 
and it's not fair. Furthermore, the damage unnecessary duties do to 
steel consumers causes the customer base for domestic steel producers 
to shrink, ultimately harming the steel industry. Sound economic policy 
cannot be made in a vacuum. When economic policy decisions are made, 
the full effects of those decisions should be taken into consideration.

  I support both a strong domestic steel industry and a strong domestic 
manufacturing base because they are vital to our national defense and 
economic security. Removing some specific duties will not harm domestic 
steel producers, who are doing quite well. In fact, domestic steel 
producers noted record earnings in 2004 (including increases as high as 
45 percent over 2003) and analysts predict a strong 2005 for the 
industry. If the AD/CVD duties for specific types of steel were 
removed, market conditions would become less distorted and steel 
producers may see some extremely high prices they charge now drop to 
just very high. This will not cause material injury to steel producers, 
and in fact could provide some much-needed relief for their customer 
base.
  This resolution does nothing to change trade law. It simply calls for 
sound policy and fundamental fairness. The DoC and ITC already have the 
authority to look at the full picture during sunset reviews of duties 
on steel products. This resolution simply calls on them to do just 
that. I urge my colleagues to join me in supporting this resolution.

                          ____________________