June 18, 2001

President George W. Bush
White House

Dear Mr. President:

I am writing on behalf of the Consuming Industries Trade Action Coalition ("CITAC"), the leading voice of downstream users of needed imported raw materials, components and finished goods. We are concerned about the costs to our economy of U.S. import restrictions. We strongly advocate a trade agenda that features open markets, expanded world trade and common sense consideration of the needs of America's consuming industries.

The plight of the integrated U.S. steel producers is now a central concern of CITAC as well as the Administration. Frankly, we opposed the initiation of a Section 201 proceeding, but we understand why it was done. It is imperative that a steel initiative work to the advantage of America broadly, rather than just a few Americans. To that end, we propose a five-point agenda to ensure that help for the steel industry is constructive for all Americans.

1. Give Consuming Industries a Voice in the Process. Industries that use steel to make products in this country need and deserve a voice in steel policymaking. We represent 50 times as many workers as are employed in steel production. While steel producers ask for relief, we want to make sure that consuming industries don't unnecessarily suffer with higher prices and shortages. Therefore, consuming industries should have a prominent place at the table when decisions are made on the future of the steel industry, import relief or other assistance to steel producers. Steel users know the market and we have important information to contribute. We need "full party status" in the Section 201 case and a constructive role when potential remedies are considered.

2. Oppose Protectionism for Its Own Sake (Stop H.R. 808 and companion legislation). We need a clear statement of opposition from your Administration to H.R. 808 and its Senate counterpart. This legislation would impose five years of WTO-illegal quotas and flout our international obligations. It would be bad for America. The U.S. steel industry does not need relief that would violate international law and encourage steel users to relocate their plants outside the United States.

3. Allow Imports of Products Unavailable from U.S. Suppliers. Steel consumers require hundreds of steel products that are not made domestically. Many of these products are highly specialized, but essential to production of everything from automobiles to fire extinguishers. If Section 201 relief is ultimately provided, a procedure must be established to exempt unavailable products from quotas, tariffs or other import restrictions.

4. Do Not Layer Restriction on Top of Restriction. Quota or tariff remedies under Section 201 must not be applied along with previous antidumping or countervailing duty relief. This would effectively lock needed products out of the U.S. market with potentially devastating consequences for U.S. steel consumers. If Section 201 relief is imposed, outstanding trade remedy measures (e.g., antidumping or countervailing duty orders) should be eliminated.

5. Do Not Rush the Process with an Early Imposition of Quotas. Interim relief prejudges the outcome of the Section 201 process. At the same time, it forces steel-consuming industries to pay the heavy price of protection before it is clear that protection is warranted.

With these commonsense and reasonable measures, assistance for the steel industry need not devastate downstream industries, including thousands of small businesses. We look forward to working with the Administration and the Congress to reach the best solution to steel problems.

Jon Jenson
Chairman, CITAC




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