[Congressional Record Volume 153, Number 83 (Monday, May 21, 2007)]
[Senate]
[Pages S6403-S6404]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself, Mr. Rockefeller, and Mr. Casey):
  S. 1440. A bill to provide for judicial determination of injury in 
certain cases involving dumped and subsidized merchandise imported into 
the United States, and for other purposes; to the Committee on Finance.
  Mr. SPECTER. Mr. President, I have sought recognition to introduce 
the Unfair Foreign Competition Act of 2007, legislation providing a 
private right of action for domestic manufacturers injured by the 
illegal subsidization and dumping of foreign products into U.S. 
markets. These unfair, and illegal, trade practices steal jobs from our 
workers, profits from our companies, and economic growth from our 
economy.
  Dumping occurs when a foreign producer sells a product in the United 
States at a price that is below that producer's sales price in its home 
market, or at a price that is lower than its cost of production. 
Subsidizing occurs when a foreign government provides financial 
assistance to benefit the production, manufacture, or exportation of a 
good. Under current law, the International Trade Commission, ITC, and 
the Department of Commerce conduct antidumping and countervailing duty 
investigations and 5-year reviews under title VII of the Tariff Act of 
1930. U.S. industries may petition the ITC and Commerce for relief from 
dumped and subsidized imports. If Commerce finds that an imported 
product is dumped or subsidized and the ITC finds that the petitioning 
U.S. industry is materially injured or threatened with material injury, 
an antidumping duty order or countervailing duty order will be imposed 
to offset the dumping or subsidies.
  However, since current administrative remedies are not consistently 
and effectively enforced, I am introducing private right of action 
legislation to enforce the law. My legislation allows petitioners to 
choose between the ITC and their local U.S. district court for the 
injury determination phase of their investigation. Doing so gives our 
injured domestic producers the opportunity to display their vigor as 
private plaintiffs in seeking enforcement of our trade laws. If injury 
is found, U.S. Customs and Border Protection would then assess duties 
on future importation of the article in question. The legal standard 
for determining dumping margins which is established by the Commerce 
Department would remain unchanged.

  I believe that introduction of this legislation will have an 
important deterrent effect on the practices of China and our other 
trading partners. Aggressive policy measures such as this legislation 
are necessary to prevent China, in particular, from causing a major 
crisis in the near future for our domestic steel industry. China has a 
well-documented history of engaging in unfair trade practices, as 
evidenced by the 61 antidumping orders in place with respect to various 
products as of October 23, 2006. The statistics on China's steel output 
are staggering. In 2005, China made more steel than the next four 
largest producers combined and data show that China continues to become 
more export-oriented. Through the first 10 months of 2006, China's 
steel tonnage exports to the U.S. market more than doubled over 2005. 
In total, Chinese steel output grew 26 percent or more than 71 million 
metric tons in 2005. The explosive growth of Chinese steel over the 
past decade would not have been possible without the support of the 
Chinese Government.
  This legislation is similar to legislation which I have introduced as 
far back as 1982 where I originally sought injunctive relief. Since its 
last introduction in the 106th Congress, several relevant statutes have 
been challenged at the World Trade Organization, WTO, prompting further 
modification to its current form. In each case, the United States has 
taken action to comply and avoid retaliatory actions by protesting WTO 
member countries. The United States took action in December 2004 to 
comply with WTO rulings on the Antidumping Act of 1916, which provided 
a private cause of action and criminal penalties for dumping, by 
prospectively repealing the act. Also, the United States took action in 
February 2006 to comply with WTO rulings on the Continued Dumping and 
Subsidy Offset Act, CDSOA, which required the distribution of collected 
antidumping and countervailing duties to petitioners and interested 
parties in the underlying trade proceedings. In both cases, the WTO 
panel found that U.S. law allowed an impermissible specific action 
against dumping and subsidization. The legislation I introduce today 
adapts to these changes in law and allows for a determination of injury 
in accordance with our international obligations.
  We have too long sacrificed American industry and American jobs 
because the executive branch, whether it is a Democratic administration 
or a Republican administration, has made concessions for foreign policy 
and defense interests. For many years, foreign policy and defense 
policy have superseded basic fairness on trade policy. I received a 
comprehensive education on this subject back in 1984 when there was a 
favorable ruling by the ITC for the American steel industry, but it was 
subject to review by the President. At that time my colleague Senator 
Heinz and I visited every one of the Cabinet officers in an effort to 
get support to see to it that the International Trade Commission ruling 
in favor of the American steel industry was upheld. Then-Secretary of 
Commerce Malcolm Baldrige was favorable, and International Trade 
Representative Bill Brock was favorable. We received a favorable 
hearing in all quarters until we spoke with then-Secretary of State 
Shultz and then-Secretary of Defense Weinberger who were absolutely 
opposed to the ITC ruling. President Reagan decided to overrule the 
ITC, and U.S. trade policy and workers again took second place to 
foreign policy concerns.
  I was reminded of this reality again in 2005 when I testified on 
behalf of the domestic pipe and tube industry in a section 421 
safeguard case against China. This safeguard provision was inserted as 
a protective measure when unique and permanent trade status was granted 
to China, a measure which I opposed. It seemed to me that based upon 
the record that China had, that normal relations could not exist 
because they have a record of not observing the law. With these 
concerns in mind, Congress inserted the section 421 safeguard 
provision. The ITC agreed with the overwhelming evidence supporting the 
claim that a surge of imports from China were creating a market 
disruption. However, President Bush decided not to uphold the ITC's 
ruling. Since that time, jobs in my state have been lost. The Section 
421 provision was included to provide protection for our domestic 
manufacturing base. Yet, none of the five petitions previously filed 
had been granted either. It is difficult to understand how safeguards 
for situations where China's conduct is excessive and unfair could be 
ignored, especially after giving special consideration by way of trade.
  While it is my hope that the administration, whether Democrat or 
Republican, would take a more objective look at trade remedies for our 
injured domestic manufacturers, I introduce this legislation today to 
provide a valuable tool for domestic industry. Strict enforcement of 
our trade laws is critical to ensuring that our domestic manufacturers 
have a fair shot at competing with foreign steel. In the current 
environment, I believe that it is necessary

[[Page S6404]]

for an injured industry to have an opportunity to go into Federal court 
and seek reliable enforcement of America's trade laws, which are 
currently not being enforced adequately.
  I ask my colleagues to join me now in supporting this legislation. I 
believe in free trade. But the essence of free trade is selling goods 
at a price equal to the cost of production and a reasonable profit. 
Where you have dumping or subsidization, it is the antithesis of free 
trade. The significant advances made by our manufacturers are 
insufficient to compete in the face of illegal trade practices such as 
dumping and subsidies. Our steel industry is made up of some of the 
most innovative, skilled, and efficient producers in the world. Our 
industry can compete if the playing field is level, but if foreign 
exporters are not held accountable, and can freely undercut American 
producers with dumped goods and government subsidies, the future of our 
steel industry will be at risk.
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