[Congressional Record (Bound Edition), Volume 145 (1999), Part 1]
[Senate]
[Pages 1241-1242]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     AMERICAN STEEL WORKERS CRISIS

 Mr. ABRAHAM. Mr. President, today I rise to address the topic 
of steel imports. The dramatic reduction in the price of imported steel 
poses a significant challenge to America's steel industry. In the first 
ten months of 1998 alone (October is the last month for which figures 
are available), Japan more than doubled the level of imports compared 
to their year-end total for all of 1997. Japan's 882,000 net tons 
imported in October appears to be an all-time monthly record. However, 
Japan is not solely responsible for the surge in imports. The total 
October 1998 steel import level was the second highest monthly total 
ever, with over 4.1 million net tons--an increase of 56% over October 
1997 levels.
  Earlier this month, a representative of the United Steelworkers of 
America union claimed that 5,000 steelworkers had already received 
layoff notices and another 20,000 were working reduced hours because of 
these imports. More recent reports indicate the number of laid-off 
workers is fast approaching 10,000. The American Iron and Steel 
Institute recently released figures which demonstrate that U.S. 
domestic steel production had been nearly decimated by the 
unprecedented surge in imports. In November 1998, U.S. steel mills 
shipped approximately 7.4 million net tons. This represents a decrease 
of 12.8% from the roughly 8.5 million net tons shipped the previous 
November. Of even more concern is that November 1998 shipments were 
down 10.6% just from the previous month! And as the import figures 
outlined above indicate, the magnitude of the situation is growing, not 
diminishing.
  Mr. President, there are several factors behind this surge in low-
priced steel imports. First, the general deflationary trends in the 
global economy have caused all commodity prices--including steel 
prices--to plummet. In my judgment, the Federal Reserve's tight 
monetary policy in 1997 and most of 1998 is to blame. While the Fed has 
taken corrective action to reduce short-term interest rates in recent 
months, commodity prices have yet to rebound. Second, the economic 
crisis in Asia and Russia has forced these countries to rely almost 
exclusively on exports to keep their economies afloat. Given the size 
of our manufacturing sector and our comparatively robust economic 
climate, the United States is an obvious, attractive export target for 
these nations. In many instances, the International Monetary Fund is to 
blame because it convinced these countries to either raise interest 
rates or devalue their currencies, which in turn allowed foreign steel 
to undercut American steel prices.
  Against this macroeconomic backdrop of generally falling prices, some 
foreign steel companies may have engaged in the practice of 
``dumping''--that is, selling steel below the cost of production. While 
we are eager to offer economic assistance to these struggling 
countries--and in many cases we have offered direct and indirect 
economic assistance to them--there is no reason we should have to 
compromise or ignore our trade laws.
  So the question that confronts us today is: What do we--the 
Administration, the Congress--do about this serious problem? The 
Administration's lack of decisive action reportedly is due to their not 
wanting to risk subjecting the fragile economies in Asia, Russia and 
Brazil to further challenges. However, our willingness to assist our 
allies and trading partners ought not translate into requiring us to 
ignore unfair trading practices--and our own trade laws--or deleterious 
effects these practices have on our workers and domestic industry.
  On the macroeconomic level, the Federal Reserve should focus on 
achieving price stability--and that means addressing deflation as well 
as inflation. The Clinton Administration must take decisive action on 
this matter quickly. Promising to talk to our trading partners in the 
hope of getting their cooperation in cutting back the import levels is 
not sufficient at this late date. In the international arena, the 
Administration must exert more leadership in arguing against currency 
devaluations. In the trade arena, the Administration must take firm 
action in enforcing our anti-dumping laws.
  To this end, I have cosponsored S. 61, a bill introduced yesterday by 
Senator DeWine, that would eliminate existing disincentives for fair 
trade in our trade laws. Specifically, under current trade law, duties 
and fines imposed on those engaged in dumping go directly to the U.S 
Treasury. However, under the DeWine bill, the duties or fines collected 
would be transferred to the affected industries, not to the U.S. 
Treasury. Therefore, continuation of unfair trade practices would 
result in the perpetrators of such activities effectively financially 
aiding their U.S. competitors.
  It is important to note that this legislation does not create new 
duties or penalties, nor does it increase existing duties or penalties. 
Frankly, this legislation will not mandate that importers raise the 
price of steel one single penny, and therefore, it should not directly 
affect the market for underpriced steel. However, in the long run, 
producers who engage in dumping will have to seriously rethink their 
unfair trade practices. Because by continuing such practices, they only 
succeed in subsidizing those among our domestic industries that are 
being hurt by their illegal actions.
  Mr. President, the recent surge in imported steel and the resulting 
job loss and scaled back production at U.S. steel plants may be a 
demonstration that current law does not effectively discourage unfair 
trade practices such as these. I have long been an ardent supporter of 
free and open trade. However, my support of free trade is prefaced on 
the notion that our trading partners will not engage in unfair trading 
practices, such as dumping, and that when our Nation is confronted by 
unfair trading practices, we will seek remedy, whether by invoking 
provisions in our own trade laws designed to combat such unfair trade 
practices or pursuing means of redress through international trade 
tribunals such as the World Trading Organization.
  As long as our trade laws prohibit dumping, it is imperative for the 
Administration to adhere to them and to implement them where and when 
the circumstances require it. To fail to do so will have consequences, 
both for American workers and industry and for

[[Page 1242]]

the principle of free trade that I believe is so important. More and 
more steel workers may be laid off and steel plants may begin to shut 
down. Our domestic steel industry, which has done so much over the last 
two decades to modernize and become competitive on an international 
basis, could become irreparably harmed.
  If things deteriorate, we will see calls for quotas on steel imports. 
We will also see a political backlash against free trade, just at the 
time when we should be entering into free trade agreements with some of 
these very regions--Asia, Pacific Rim, and South America. This will 
only serve to set us back further from being the dominant player on the 
global marketplace in the next century.
  Finally, let me pay tribute to the individuals and groups that have 
travelled all the way to Washington, D.C. to attend today's ``Stand Up 
for Steel'' rally. These people are here to raise our consciousness 
about the steel import situation. In my office alone, we have already 
received an estimated 15,000 letters on this issue. My constituents are 
rightly concerned by the situation. It is my hope that after attending 
the rally held at the Capitol this afternoon and after learning of 
legislation being introduced by interested Senators, such as S. 61, 
that these people will return home knowing that we in Congress are not 
ignorant of this crisis or of their concern.

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