Senator Arlen Specter - Pennsylvania

SENATOR SPECTER TESTIFIES BEFORE THE INTERNATIONAL TRADE COMMISSION
Hearing on Cold Rolled Steel

Jul 18, 2002 -

Testimony of the Honorable Arlen Specter

Chairwoman Okun and members of the Commission, I appreciate the opportunity to speak to you today as part of this important investigation. The outcome of this investigation will shape the future of American cold-rolled steel producers and their workers. Your vote will determine whether American steelworkers will be able to compete with foreign steel manufacturers that play by the rules, or whether those foreign producers will be allowed to continue violating our trade laws. American steel companies have been devastated by dumped foreign cold-rolled imports, and the Commerce Department in its preliminary and final determinations confirmed the severity of this dumping. With dumping margins as high as 150 percent, it leaves little room for doubt that foreign steel producers have a total disregard for U.S. trade laws. Thousands of jobs in Pennsylvania's steel industry are still threatened by the unfair and illegal trading practices of foreign steel producers.

Members of the Commission, I urge you to look beyond the current tariffs established as a result of the Section 201 investigation. While these important tariffs are providing some breathing room for a battered domestic steel industry, they do not address the problem of unfairly traded imports. Let me be clear. This investigation deals with proven violators of U.S. trade laws. The facts of this investigation make it abundantly clear that the American steel industry has been injured and threatened by unfairly traded cold-rolled steel imports. Your responsibility in this investigation is to examine the facts as they pertain to cold-rolled steel imports and to determine whether injury has occurred or is likely to occur as a result of these unfairly priced imports.

The respondents in this investigation have demonstrated a willingness to dump their products into the U.S. market whenever the opportunity presents itself. They have a proven track record of dumping. The Section 201 tariff measures are by design not meant to address such unfair trading practices. The Section 201 tariffs are a temporary measure designed to provide a beleaguered industry a specific period of time to recuperate from general low-priced imports that have, as a whole, caused serious injury to that industry. The tariffs are phased out over a specific period of time. Hence, the current Section 201 tariffs will be eliminated after three years regardless of market conditions or threat to further injury to American steelworkers and companies. There is no mechanism to discourage dumping. Finally, I must note that in my view, in instances where the ITC determined that products were dumped at levels exceeding 150 percent of the normal price, a declining 30 percent tariff can have only limited impact.

This investigation must remain focused on the facts. The facts are that thousands of American steelworkers in the cold-rolled sector have lost their jobs. The facts are that dozens of American steel companies have been forced to either file for bankruptcy or close their doors permanently. The facts are that most domestic steel producers are still operating at a loss. And finally, but by no means less relevant, the fact is that as long as foreign steel overcapacity exists, foreign producers will try to find a way to dump their excess steel into the U.S. market. I strongly believe that the facts of this investigation support a finding of injury or threat of injury.

I believe that the recent price normalization in the U.S. steel market may only be temporary. I believe this for two reasons. First, the Section 201 tariff measures that are responsible for the normalization of prices are temporary. Second, foreign steel producers will place tremendous pricing pressures on cold-rolled steel as soon as the tariff measures are reduced over the next three years. On July 9, 2002, the Agence France Presse quoted Pascal Lamy, the European Trade Commissioner, as saying that the "price bubble" created by the Section 201 tariffs "won't last."

As you consider the facts of this case and the effects this dumping of cold-rolled steel has had on our domestic industry, I am confident you will recognize foreign producers cannot be allowed to continue violating our trade laws. I thank you for your time.

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