TARIFF-BASED SECTION 201 RELIEF -- HON. AMO HOUGHTON (Extensions of Remarks - February 27, 2002)

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HON. AMO HOUGHTON OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, February 27, 2002

Mr. HOUGHTON. Mr. Speaker, I rise today along with many of my fellow colleagues to urge the President to implement a strong, effective remedy for the U.S. steel industry as a result of the ITC's recent Section 201 investigation, even if I speak from a somewhat different perspective than many of these colleagues.

While I am well aware of the importance of a stable domestic steel industry to the financial security and national defense of this country, I do not represent a district with an extensive steel industry presence that has been devastated by the recent steel crisis. However, I do have a steel specialty company that closed last year, laying off many individuals. The plant was recently purchased by a new owner and is in the process of reopening. In addition, I have many constituents in the district with steel-related jobs that have been hurt by the steel imports. In New York State, the number of employees in the New York steel industry dropped by 27 percent from January
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1998 to July 2001. I also represent thousands of hard-working Americans who want to know that America's trade laws are going to be enforced if their own livelihoods ever come under a similar attack. That is why I stand before you today.

I applaud the President for his recognition that the domestic steel industry is in the midst of a crisis and for initiating a Section 201 investigation. That investigation has culminated in a unanimous agreement at the ITC that the U.S. steel industry has been significantly injured by the unfair trade practices of foreign producers and nations. Our laws now put the ball back in the President's court and call on the Administration to implement a remedy that will give the domestic industry a real opportunity to recover from years of unfair trade and to compete in today's ever-changing marketplace. This remedy must come in the form of strong, tariff-based relief.

An effective tariff-based remedy would help return steel prices to their normal pre-crisis levels and allow American steel companies to make the necessary investments to remain viable and competitive in the future. It would also stimulate foreign governments and steel producers to make the difficult decisions that U.S. producers have already made--to bring stability and balance to the global steel market. In order to be effective, this remedy must meet certain criteria.

The first key to an effective tariff-based remedy is that it must be substantial in order to ensure that import prices return to market-based levels. To that end, the domestic industry has determined that a 40 percent tariff rate on flat-rolled products is warranted. In the Section 201 investigation, two of the ITC Commissioners fully agreed with this determination.

An effective remedy also must be comprehensive and must be imposed for a substantial period of time. Applying a consistent tariff-based remedy across all flat steel products is the only fair way to impose relief, and the only way to ensure that foreign producers don't simply shift their excess production to other areas. Further, in order for a remedy to have any real effect on the domestic and global marketplace, it must be enforced for at least four years. This will allow the domestic industry to make the necessary adjustments to import competition, and the President to achieve his objective of repairing the global steel trading system.

In endorsing the use of an effective, tariff-based remedy, I strongly urge the President to steer clear of quota-based relief. Such a remedy would further distort the global marketplace by providing an artificial incentive for foreign producers to ship substantial amounts of low-priced steel into our borders as quickly as possible in order to ``get in under the quota.'' The last thing U.S. producers need at this time is another uncontrolled flood of under-priced steel.

The Administration has promised on a number of occasions to be tough on unfair trade, and now is the time to live up to that promise. The President must implement this effective tariff-based relief in order to demonstrate to foreign producers and governments that the Administration is serious about addressing not just the problem of foreign excess steel capacity, but also the problem of unfair trade practices in general. Our laws are consistent with international law and designed to ensure that our industries have somewhere to turn for relief when they fall victim to unfair trade. These laws are only effective to the extent they are enforced, and their enforcement is a duty that we owe to the American people.
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