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201 Stakeholders Not Just Domestic and Foreign Mills

To the Editor:

Once again, I write to American Metal Market to correct the American Iron and Steel Institute's seriously flawed spin on the objectives of America's consuming industries. Mr. Sharkey is attempting to perpetuate steel industry mythology ("AISI repudiates steel consumers' agenda," June 22, 2001).

First and most importantly, the Consuming Industries Trade Action Coalition (CITAC) aims to strengthen US trade law by empowering the stakeholders who are at risk when trade restrictions are considered. Trade laws must enjoy the support of all Americans. At present, they exclude important segments of our economy. The 9.4 million American workers in steel-consuming sectors deserve at least as much say in trade policy as a mere fraction of that number employed in the domestic steel industry. And if the steel industry believes in the strength of its case, what can it lose by bringing other interested parties into the process?

Second, CITAC's goal is a healthy US economy built on globally competitive companies, including globally competitive integrated steel mills. To reach this goal, any steel initiative must work to the advantage of America broadly, rather than just a few Americans. This means that the interests of US steel consumers, and their need for access to world-competitive steel, must be taken into account in fashioning any remedy. Contrary to Mr. Sharkey's characterization, CITAC's focus is long-term - it is those that favor "quick-fixes" for the steel industry, regardless of the consequences to the economy as a whole, that are taking the short-term view.

Therefore, for any steel initiative to work to the advantage of America broadly the following must occur:

  • Steel consumers, whether they are CITAC members or not, should have a role in the steel policymaking process. This is about giving a voice to steel-consuming industries, which employ 50 American workers for every worker employed in steel production. Unlike Mr. Sharkey, we do not advocate saving ourselves at the expense of American companies and workers that far outnumber us - and not giving them a seat at the table to boot.
  • President Bush should clearly declare the Administration's opposition to H.R. 808, The "Steel Revitalization Act," which would impose WTO-illegal quotas on steel imports and flout the United States' international obligations. H.R. 808 is bad for America. AISI is "neutral" on H.R. 808 because its profitable members disagree with the provision that would tax steel shipments to subsidize unprofitable companies.
  • A procedure must be established to exempt unavailable steel products from quotas, tariffs or other import restrictions, whether or not they are "controversial" to the steel industry. As we have pointed out before, steel used in fire extinguishers and truck brake parts, as well as stainless-steel floor plate; radiation-free steel for metal detectors; catalytic converter foil; tire cord quality wire rod; and other steel products are not sufficiently available from domestic sources. Mr. Sharkey's refusal to acknowledge that there are a large number of steel products that are not available from domestic sources simply does not reflect reality. Even the Administration has apparently recognized there are a significant number of products that would be unavailable as a result of import restraints by excluding some of these products from the Section 201 proceeding. Unfortunately, the Administration did not go far enough.
  • Quotas or tariff remedies under Section 201 should not be applied on top of existing antidumping or countervailing duty relief. If they are, they could effectively lock needed products out of the U.S. market, thereby creating artificial shortages of needed products. This could have devastating consequences for 9.4 million American employees of steel-using manufacturers.
  • Interim relief should not be imposed. We are glad to see that Mr. Sharkey recognizes the validity of our view on this point. We maintain that imports of most steel products have declined and interim relief is not warranted. Interim relief prejudges the outcome of the Section 201 process and forces steel-consuming industries to pay the heavy price of protection before it is clear that protection is warranted.

Of course, when a few integrated steel producers and their unions are seeking a bailout at the expense of their customers, American taxpayers and consumers, a lot of mythology is to be expected. One needs it to mask an otherwise untenable position. The time has come to face reality. Too much is at stake to do otherwise.

Jon E. Jenson
Consuming Industries Trade Action Coalition (CITAC)
President Emeritus, Precision Metalforming Association (PMA)
5700 Brookside Rd.
Independence, OH 44131



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