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Laurin M. Baker

June 18, 2004

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Steve Alexander



Steel Consumers need stable, adequate, quality supply of globally priced raw materials

Washington, DC – The Consuming Industries Trade Action Coalition’s (CITAC) Steel Task Force (STF) will continue to advocate on behalf of America’s steel consumers, focusing on ensuring access to a stable, adequate, quality supply of globally priced raw materials for steel consumers, the group announced today.

The announcement was made at an STF-sponsored Congressional staff briefing, which included representatives of steel-using firms facing steel shortages and allocations and rapidly rising prices just when the economic recovery is beginning to show signs of reaching the manufacturing sector.

The STF was originally formed in 2002 to advocate on behalf of steel consumers for the termination of the Section 201 steel tariffs imposed by the Bush Administration. The STF was credited with helping convince the Administration to terminate the tariffs in December 2003, 18 months ahead of schedule.

"We are continuing the efforts of the STF because steel consumers in the United States are facing even more challenges to the future of their businesses now than when the steel tariffs were in place," said Laurin M. Baker, Washington Representative for the group. "U. S. steel prices are currently higher than virtually any place in the world, due to a variety of factors, and the domestic steel industry is producing only about 60 to 70 percent of total U. S. demand."

"Steel consumers are just beginning to see some positive economic activity in their businesses, and the danger is that high raw material prices and shortages will choke off that recovery before it can take hold," said Michael J. Lynch, Vice President of Government Affairs for Illinois Tool Works, a major consumer of steel in a variety of businesses and a member of the STF.

During the recent debate on steel tariffs steel consumers learned the importance of participating in the public policy process, Lynch said.

"Because steel consumers had not been active in Washington over the years on steel issues, our concerns were not well understood by policy makers who were making key decisions that often adversely impacted our business," Lynch said. "We don’t want to be in that position in the future, and that is why we are pursuing an ongoing effort to inform and educate government officials about the vital role of manufacturing in general, and steel-consuming manufacturing in particular."

"We often hear about a level playing field in trade. Well, steel consumers need a level playing field in the development of U.S. trade policy to ensure that they have access to a stable, adequate supply of globally priced steel. Efforts to protect the domestic steel industry from global competition create competitive disadvantages for steel consumers in the U.S., because their offshore competitors have access to lower-cost steel. As we saw during the 201 tariffs, protection for a small group of producers can have a far greater negative impact on a large sector of the economy than any benefits they create," Lynch stated.

The imposition – and the early termination – of the steel tariffs made steel consumers realize that if they don’t participate in the political and policy process in Washington, DC, "then they have no one to blame but themselves for adverse policy decisions," said Baker.

The CITAC Steel Task Force is comprised of companies that use steel, organizations of steel consumers, ports and related industries. CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries have access to global markets for imports that enhance the international competitiveness of American firms.




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