[Federal Register Volume 67, Number 10 (Tuesday, January 15, 2002)]
[Notices]
[Pages 1958-1959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-977]


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DEPARTMENT OF COMMERCE

Bureau of Export Administration

[Docket No. 010412092-1296-04]


Report on the Effect of Imports of Iron Ore and Semi-Finished 
Steel on the National Security

AGENCY: Bureau of Export Administration, Department of Commerce.

ACTION: Publication of Executive Summary of Report from the Secretary 
of Commerce to the President on the Effect of Imports of Iron Ore and 
Semi-Finished Steel on the National Security/Notice of availability of 
full report.

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SUMMARY: On October 29, 2001, the Secretary of Commerce (``Secretary'') 
submitted a report to the President summarizing the findings of an 
investigation conducted by the Department pursuant to Section 232 of 
the Trade Expansion Act of 1962, into the effect of imports of iron ore 
and semi-finished steel on the national security of the United States. 
Based on the evidence gathered in that investigation, the Secretary was 
unable to conclude that imports of iron ore and semi-finished steel 
threaten to impair the national security of the United States, or to 
recommend to the President that he take action under Section 232 to 
adjust the level of imports of these items. Included herein is the 
Executive Summary of the Secretary's report to the President.

ADDRESSES: Copies of the Secretary's report and certain records related 
to this investigation (with any business confidential information 
redacted) are accessible in accordance with the regulations published 
in part 4 of title 15 of the Code of Federal Regulations (15 CFR 4.1 et 
seq.). Specifically, the above documents are maintained on the Bureau 
of Export Administration's Web page, which can be found at http://www.bxa.doc.gov (see Freedom of Information Act (``FOIA'') heading). 
Alternatively, any person may request that a copy of the Secretary's 
report be sent to him by calling (202) 482-0500.

FOR FURTHER INFORMATION CONTACT: Daniel O. Hill, Director, Office of 
Strategic Industries and Economic Security, Bureau of Export 
Administration, U.S. Department of Commerce, (202) 482-4506.

SUPPLEMENTARY INFORMATION:
    On February 1, 2001, the Secretary initiated an investigation under 
Section 232 to determine the effects on the national security of 
imports of iron ore and semi-finished steel. This investigation was 
conducted at the request of Representative James Oberstar of Minnesota 
and Representative Bart Stupak of Michigan. For further details on this 
investigation, see the Federal Register notices of February 6, 2001 (66 
FR 9067), April 18, 2001 (66 FR 19917), June 14, 2001 (66 FR 32315), 
and July 10, 2001 (66 FR 35927).
    On October 29, 2001, the Secretary concluded his investigation and 
submitted a report to the President. Based on the evidence gathered in 
that investigation, the Secretary was unable to conclude that imports 
of iron ore and semi-finished steel threaten to impair the national 
security of the United States, or to recommend to the President that he 
take action under Section 232 to adjust the level of imports of these 
items. The Executive Summary of the Secretary's October 2001 report to 
the President, titled ``The Effect of Imports of Iron Ore and Semi-
Finished Steel on the National Security,'' is reproduced below in 
accordance with 15 CFR 705.10.


[[Page 1959]]


    Dated: January 10, 2002.
James J. Jochum,
Assistant Secretary for Export Administration.

I. Executive Summary

    This report summarizes the findings of an investigation conducted 
by the Secretary of Commerce (``Secretary'') pursuant to Section 232 of 
the Trade Expansion Act of 1962, as amended, 19 U.S.C. 1862 (``Section 
232''), into the effects of imports of iron ore and semi-finished steel 
on the national security of the United States. The conclusions of this 
report are as follows:
    (1) Iron ore and semi-finished steel are important to U.S. national 
security. Specifically, iron ore and semi-finished steel-- as raw and 
semi-finished materials consumed by certain segments of the steel 
industry in the production of finished steel products--are needed to 
satisfy the requirements for finished steel products of (i) the U.S. 
Department of Defense (``DoD''), and (ii) certain industries that are 
critical to the minimum operations of the U.S. economy and government.
    (2) Imports of iron ore and semi-finished steel could threaten to 
impair U.S. national security in either of two ways: (i) through 
excessive domestic dependency on unreliable foreign suppliers, or (ii) 
if such imports fundamentally threaten to impair the capability of the 
U.S. iron ore and semi-finished steel industries to satisfy national 
security requirements.
    (3) In fact, however, there is no probative evidence that imports 
of iron ore or semi-finished steel threaten to impair U.S. national 
security. There is neither evidence showing that the United States is 
dependent on imports of iron ore or semi-finished steel, nor evidence 
showing that such imports fundamentally threaten the ability of 
domestic producers to satisfy national security requirements. Specific 
findings supporting this conclusion include the following:
     National defense requirements, as communicated to the 
Department of Commerce (``Department'') by DoD, for finished steel--and 
thus for iron ore and semi-finished steel as inputs--are very low and 
likely to remain flat over the next five years. DoD's current and 
projected demand for iron ore and steel can be readily satisfied by 
domestic production. Moreover, DoD already has established domestic 
preferences that apply to essentially all of the steel used in weapons 
systems; accordingly, no weapons system is dependent upon foreign 
steel. DoD has concluded that ``imports of iron ore and semi-finished 
steel do not currently affect the national security when assessed in 
terms of the ability to meet defense demands.''
     The demand of critical industries for iron ore and semi-
finished steel can be readily satisfied by domestic production, even 
assuming that all such demand were necessary to preserve the national 
security (which is not the case).
     Consideration of other relevant factors, as dictated by 
Section 232, does not demonstrate that imports of iron ore or semi-
finished steel threaten to impair U.S. national security. U.S. industry 
currently has, and anticipates continuing to have in the future, 
sufficient human resources, products, raw materials, and other supplies 
and services needed for the production of iron ore and semi-finished 
steel.
     Imports of iron ore and semi-finished steel are from 
diverse and ``safe'' foreign suppliers, with the largest suppliers of 
these products being U.S. allies in the Western Hemisphere (Canada, 
Mexico, and Brazil).
     Although domestic manufacturers of iron ore and semi-
finished steel clearly are enduring substantial economic hardship, 
there is no evidence that imports of these items (which account for 
approximately 20 and 7 percent of U.S. iron ore and semi-finished steel 
consumption, respectively) fundamentally threaten to impair the 
capability of U.S. industry to produce the quantities of iron ore and 
semi-finished steel needed to satisfy national security requirements, a 
modest proportion of total U.S. consumption.
     These conclusions take into account the campaign against 
terrorism resulting from the events of September 11, 2001, and the 
requirements of related military operations.
    Accordingly, the Department is unable to conclude that imports of 
iron ore and semi-finished steel threaten to impair the national 
security of the United States, or to recommend to the President that he 
take action under Section 232 to adjust the level of imports.

[FR Doc. 02-977 Filed 1-14-02; 8:45 am]
BILLING CODE 3510-33-P