August 22, 2006

The Honorable Clay Shaw
Chairman, Subcommittee on Trade
U.S. House Ways and Means Committee
1102 Longworth House Office Building
Washington, DC 20515

Dear Chairman Shaw:

On behalf of the Consuming Industries Trade Action Coalition (CITAC), we write to offer our strong support for HR 4217, the American Manufacturing Competitiveness Act, introduced by Rep. Joe Knollenberg (R-MI) and cosponsored by 57 Members of the House, both Republican and Democrat. CITAC represents American manufacturers and retailers of a wide variety of consumer goods, from auto parts to household items.

Some have inaccurately characterized HR 4217 as "weakening" U.S. trade laws. In fact, HR 4217 improves current U.S. law by requiring a balancing of interests and allowing participation by all stakeholders.

Antidumping and countervailing duty (AD/CVD) actions can provide important protections to U.S. industries when applied in an objective manner. However, while they are intended to help one U.S. industry they can have unintended negative consequences on other U.S. industries. Under current law industrial users of the product in question, who have first hand knowledge of the marketplace and the potential economic impacts of imposing duties, are excluded from the process. HR 4217 would remedy this situation by giving U.S. companies that are industrial users of products a legal stake in the proceedings that determine dumping and injury, and would require the International Trade Commission (ITC) to consider the impact such duties would have on those industrial users before any duties are imposed.

HR 4217 makes only two changes to AD/CVD law: First, it provides U.S. industrial users of products standing to participate in the process, a matter of fundamental fairness. Second, it directs the ITC to consider one additional factor in determining whether to impose an AD or CVD remedy — whether U.S. industrial users will be harmed by such a remedy.

HR 4217 would simply require the ITC to weigh the benefits that would accrue to the petitioners against any harm that would occur to the industrial users before deciding whether to impose AD/CVD duties against any product. The bill does not require the Commission to find in favor of the industrial users, but it does require the agency to ensure that decisions made regarding trade remedies are economically sound and not unduly detrimental to U.S. manufacturers.

Steel presents a powerful example of a product affected by the problems that can result from current U.S. trade law. The domestic steel industry produces only about 75 percent of the steel needed to meet U.S. steel consumers' demand. Many of the 150 existing dumping orders on steel products include grades or chemistries that are not available in the U.S., thereby forcing U.S. industrial users of those products to pay higher prices than their offshore competitors. And under existing law, those industrial users cannot be heard or produce information relevant to the case to be considered by the Department of Commerce or the ITC in determining whether to impose import restrictions. HR 4217 gives those consumers legal standing in such cases, and requires the ITC to consider their information.

HR 4217 is entirely consistent with WTO agreements. In fact, many countries that employ AD/CVD measures allow for analysis of the impact of duties on the industries that use the products in question. The U.S. is virtually alone in failing to analyze the consequences of AD/CVD remedies on its economy, and U.S. manufacturers are disadvantaged by that failure.

Supporters of HR 4217 are not proponents of unfair trade practices. On the contrary, HR 4217 would strengthen our trade laws by ensuring that they work to the benefit of the greatest number of U.S. manufacturers and their employees.

U.S. industrial users only want equal access to a U.S. legal process to ensure that decisions made under that process, which have the potential to harm their business, are made with full knowledge of the effects of those decisions. HR 4217 would give them that access. We appreciate the support of the 57 cosponsors of HR 4217 and urge Congress to pass this legislation giving U.S. manufacturers the right to participate fully in trade cases before the Department of Commerce and the ITC.