Steel Users Urge President to Reject Steel Industry's Call for Import Relief
Bureau of National Affairs
Daily Report for Executives
October 30, 2000

By Rossella Brevetti

Reproduced with permission from Daily Report for Executives, No. 210, p. A-9 (Oct. 30, 2000). Copyright 2000 by The Bureau of National Affairs, Inc. () http://www.bna.com.

The Consuming Industries Trade Action Coalition, a coalition of steel-using companies and trade associations, Oct. 26 urged President Clinton to reject calls from U.S. steelmakers for relief from imports.

CITAC was reacting to an Oct. 16 letter from steel industry and union officials asking the Clinton administration to self-initiate a case under Section 201 of the 1974 Trade Act. Section 201 cases can result in import restrictions if the investigated product is found to be a substantial cause of serious injury or threat of serious injury to the U.S. industry.

The industry letter also urged that existing restrictions on steel be kept in place and that agreements be considered with countries that are not World Trade Organization members. Steel imports surged to unprecedented levels in the United States in 1998.

The industry letter warned that imports are again above pre-crisis levels and are moving to where they stood at the height of the crisis. "Because the relief Big Steel demands is unwarranted and would create far more harm than good to the United States economy, such a demand is contrary to the national interest. We urge you to reject this and other calls for extraordinary trade restrictions," CITAC Chairman Jon E. Jensen wrote in a letter to the president. Copies of the letter were sent to the House and Senate leadership.

CITAC members include major producers of automobiles, heavy machinery, and a range of other products. "Many of our members rely on steel products. However, U.S. producers do not make enough steel or the right kind of steel to satisfy U.S. demand--that is why we have substantial steel imports....Only adequate supplies of imports ensure that downstream industries have sufficient supply," the letter said. The letter said that relying on import restrictions is not a solution for U.S. steelmakers. "Import restrictions not only hurt our industries in the U.S.--they subsidize our competitors. As downstream markets are distorted, U.S. customers will move out of the country, where they can get the raw materials they need," it added.

Jensen called the requests of the steel industry "inappropriate and ill-advised." If the steel industry has a good case under Section 201, they should bring it by petition, he stated in the letter. White House Chief of Staff John D. Podesta recently told United Steelworkers of America President George Becker that the administration was ready to take "all reasonable steps" to prevent a repeat of the 1998 steel import crisis. The Podesta letter to Becker stopped short of making any commitment on initiation of a Section 201 case.





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