November 22, 2000 CITAC Letter to:
The Honorable Dave Camp
We, the Consuming Industries Trade Action Coalition (CITAC) and others, urge that you sign a letter to the President written by Chairman Archer and Trade Subcommittee Chairman Crane. This letter (copy attached) sends a very important message to the White House that trade restrictions should be avoided because of their adverse impact on our economy. Such trade restrictions would only be appropriate, in our view, if their effects on consuming industries are carefully considered and weighed against the possible benefits.
Steel producers in this country and the Steelworkers union have pressed for import restrictions on steel products that are needed by consuming industries. Other U.S. industries are watching to see whether steel producers will be successful in their efforts to gain special trade protection. If they do, consuming industries in this country will be hurt even more.
The Chairmen's letter to the President properly urges the President to consider the effect of trade restrictions on America's consuming industries before taking any action. This is wise. The harmful effects of trade restrictions are always greater than the benefits for the protected industries. Therefore, we need to ensure that economic restrictions are undertaken only in the most serious cases and for the best of reasons, despite the harm they do.
In general, import restrictions simply do not work very well. Further, because they insulate protected producers from pressure to improve their competitiveness, they can actually reduce the efficiency of the industries they are intended to help. The steel industry, in our view, illustrates this point. Long-standing protection (from voluntary restraint agreements, price supports and trade cases) of integrated steel producers in this country has not made them more competitive. Indeed, protection may have helped hasten their decline. It is time to reconsider the wisdom of this approach.
Please join with us in supporting the Committee Leadership's initiative to remind the Administration, at this critical time in our political life, that there are serious issues on the question of trade protection. We thank you for your consideration.
Consuming Industries Trade Action Coalition
Cc: Angela Ellard