"Foreign Steel's a Must, Some Businesses Say"
The Plain Dealer, Cleveland, Ohios major daily newspaper reports that local steel using businesses are concerned about import restrictions to protect troubled local steel manufactueres. William Sopko, head of Stamco, a parts making company, says that his company would face financial trouble if he could not buy foreign steel. Thomas Gerdel reports that Sopko and other steel consumers, "fear that broad import restrictions could make it harder to find the kinds of steel they need." A spokesman for the local steel users estimates that steel consuming industries employ close to 50 workers for every one American employed by the domestic steel industry.
Jon Jenson, chairman of Consuming Industries Trade Action Coalition, and president emeritus of the Precision Metalforming Association, said the domestic "island" of high-priced steel creates problems for local stamping firms and thousands of other US manufactures. He said import limits would not bring LTV (a steel maker which filed for bankruptcy on December 29, 2000) back to profitability, but would lead to higher prices and shortages for metal fabricators, the automobile industry, as well as for producers of appliances and heavy equipment. "It's common for work to leave and go where materials are less costly."
"Bush Stalls New Effort by US Steel Industry to Fight Imports"
Bloomberg News Service reports that the Bush administration has decided to block an investigation initiated under President Clinton into whether imports of iron ore and some semi-finished steel products threaten national security. The investigation began during Clinton's last week of his presidency. A final decision on whether to conduct the Section 232 investigation will come after Commerce Secretary Don Evans reviews the case.
Section 232 of the Trade Expansion Act of 1962 states that if an administration finds that US over-reliance on imports of a product threatens national security, measures can be put in place to limit or block the product to encourage greater domestic production.
Jon Jensen, President of the Consuming Industries Trade Action Coalition, noted that the steelworkers' union has proposed a number of protectionist measures to Bush, including a five-year quota on steel imports, a $10-per-ton surcharge on steel shipments and a government handout of $10 billion to the domestic industry. "These protectionist measures will punish American consuming industries for the domestic steel industry's failure to modernize and become competitive in the global market," said Jensen.
"Emptying the Penalty Box"
The National Journal reports that the debate over use of funds from trade violations has been resolved for now through passage of the Continued Dumping and Subsidy Offset Act (the so-called Byrd Amendment). In October, Senator Robert Byrd, a supporter of the companies receiving reparations, inserted an amendment in the fiscal 2001 Agriculture spending bill that would give the proceeds of trade-penalty cases to companies hurt by unfair trade practices.
A leading opponent of the Byrd amendment is the Consuming Industries Trade Action Coalition. CITAC members believe the Byrd amendment will encourage American companies to file more complaints and in so doing, will "scare away foreign competition that will drive down the cost of raw materials," says Coalition counsel, Lewis E. Leibowitz, a partner at the law firm Hogan & Hartson. "Competitiveness will suffer, and some [American] companies will have to move offshore or cut back on production." He added that in time the World Trade Organization will likely reject the rule, as it runs counter to U.S. obligations under the WTO agreement. However, congressional repeal would be quicker and therefore more desirable.