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LEADERS OF U.S. CONSUMING INDUSTRIES GO TO CAPITOL HILL STRESSING NEED FOR VOICE IN TRADE POLICY FORMULATION

Washington, DC - Some fifty corporate executives representing American consuming industries are meeting with Members of Congress today to stress the need for consuming industries to have a voice in trade policy formulation. The executives, organized by the Consuming Industries Trade Action Coalition (CITAC), include Presidents and CEOs from around the country. The majority of these executives represent companies that consume large amounts of domestic and imported steel, which they must buy at world-competitive prices to remain profitable in the markets they serve.

The visiting executives are urging a bipartisan group of legislators to consider the consequences of trade restrictions on America's consuming industries, which employ many more workers than the industries pushing for trade protection. These executives cite the current steel trade debate as a prime example of why consuming industries should be involved in trade policy formulation. Many consuming industries believe that the Bush Administration's initiation of a 201 investigation of steel imports and a steel quota bill (HR 808) currently in the House have proceeded without adequate consideration of the consequences for steel consumers.

"If, as a result of the 201 investigation, quotas or other restrictions are placed on steel imports, not only consuming industries, but their 9.4 million employees and every American consumer who buys a steel-containing product will suffer the consequences. Thirty-plus years of protecting the steel industry has proven that restrictions on steel do more harm than good and consumers need to be part of the process to make that known," said CITAC Chairman Jon Jenson.

According to a study commissioned by the CITAC Foundation and released in May 2001, the steel quota bill would cost as many as nine jobs in steel-using industries for every single job it saves in the steel industry. The bill would also cost American taxpayers $14.5 billion over its five-year life.

"We will tell the Representatives and Senators with whom we meet that imports for a metalworking company like mine are not optional, but essential. Import restrictions hit us where it hurts and can not solve the fundamental problems facing the domestic steel industry," said Jim Zawacki, a Member of the Board of the Precision Metalforming Association (PMA), a CITAC member organization. His company, GR Spring & Stamping, located in Grand Rapids, Michigan, forms steel for automotive, appliance and office furniture applications. "I make steel-purchasing decisions based on processing characteristics, quality, availability, and price. US producers can only supply 75-80 percent of US demand and then they accuse us of seeking bargain-basement priced imports to put them out of business. How could users of steel do business at all with the limitations domestic steel producers would impose?"

In addition to harming consuming industries and working families that depend on them, steel import restraints, either quotas as contained in HR 808 or those that could result from the 201 investigation, have already caused concern among U.S. trading partners and could produce damaging retaliation by the international community, threatening future trade agreements to the detriment of all American consumers.

Steel will not be the only trade issue discussed with the legislators. "We don't use steel, but we're concerned about the implications this process has for us. Consumers have very limited opportunities to participate in the International Trade Commission process. U.S. businesses that purchase domestic and imported products, including retailers, should have full-party status in these types of trade cases, including the right to comment on all the evidence presented. We want those provisions in place when industries such as lumber or textiles come knocking for import restraints," said Jonathan Gold, Director of International Trade Policy for the International Mass Retail Association. "The restraints do not solve the perceived problem. They only hurt the ultimate consumer."

CITAC advocates reforms that would make consuming industries (purchasers of domestic and imported products) full parties to trade cases. In the steel 201 investigation, for example, CITAC proposes that consumers have a voice in the process through full-party status in the ITC investigation; that an orderly, balanced and inclusive review of the steel import situation be conducted; that new quotas or tariffs not be layered on top of existing restrictions; and that unrestricted imports of any steel products that are not available from US suppliers be guaranteed.

According to Jenson, "We want to see a strong and competitive U.S. steel industry. Our goal is to provide every opportunity for American companies to compete in the global market. Especially at a time like this when the US economy is slowing, the worst action we can take is to limit the opportunities for our globally competitive companies. It is in the interest of every American for consumers to weigh in."

CITAC is a coalition of companies and organizations committed to promoting a trade arena where US consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.