Washington, D.C.   -  Congressional Steel Caucus Chairman Phil English (R-Pa.) testified before the International Trade Commission (ITC) on behalf of the American steel industry during the Commission’s sunset review proceedings on the antidumping (AD) and countervailing duty (CVD) orders currently in place on certain corrosion-resistant carbon steel products.

During his testimony, English reiterated the need for U.S. companies to utilize trade remedy laws such as AD and CVD to protect against unfair and illegal trade practices by our foreign competitors and warned of the harm domestic steel producers would suffer if the orders were lifted.  English’s testimony is in conjunction with a letter he spearheaded last week, calling on the Commission to continue the current duty orders.  English’s letter was supported by a group of 82 bipartisan House lawmakers.

“As long as global overproduction of steel, illegal subsidization and reckless dumping continue, America’s trade remedy laws must be used to level the playing field,” said English, a member of the House Ways and Means Trade Subcommittee.  “Today, I am asking the Commission to recognize the injury domestic producers would suffer if the current orders were lifted.  Allowing them to be revoked would only reward those who continue to duck the rules and punish American workers who have bore the brunt of their illegal practices.”

The ITC is conducting a five-year (sunset) review of AD and CVD orders on corrosion-resistant steel and cut-to-length plate from Australia, Belgium, Brazil, Canada, Finland, France, Germany, Japan, Korea, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom.  The relief has been in place since 1993. 

Under U.S. law, these orders will be retained for another five years if it is determined that the revocation of relief would be likely to result in:
(a) a continuation or recurrence of dumping or a countervailable subsidy;  and
(b) a continuation or recurrence of material injury to domestic producers.

The Commerce Department has already made the former determination.  If the ITC, after completing this investigation, makes a finding that injury would be likely to continue or recur, the relief will be retained.

English has been Chairman of the Congressional Steel Caucus for five years and helped win Section 201 relief from the 1998 surge in steel imports.  

**Copy of the testimony follows:                                                                        

U.S. Rep. Phil English (R-Pa.)
Testimony Before the International Trade Commission
Sunset review proceedings on AD and CVD orders on certain corrosion-resistant carbon steel products. from Australia, Belgium, Brazil, Canada, Finland, France, Germany, Japan, Korea, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom.
October 17, 2006

Chairman Pearson, and Members of the Commission, thank you for the opportunity to present testimony today regarding the five-year Sunset Reviews of antidumping and countervailing duty orders on corrosion-resistant Steel.  In my view, these orders should be maintained to ensure that domestic steel producers have a fair chance to compete.  As always, you and your staffs undertake the complex analysis associated with these cases and I thank you for your meticulousness. 

It is often stated that, “U.S. manufacturers can compete with anyone when given a level playing field.”  It is true that American industries, and particularly the steel industry, can compete on a level playing field because they have made and continue to make the necessary investments and human resource decisions to remain cutting edge in their field.  In other words, they have made the tough choices that often include furloughing workers to be the most efficient producers they can be. 

Producers that make the right choices and play by the rules should be unencumbered to use the trade remedy laws Congress created to police our market from illegally traded imports.  To suggest that the playing field is not level when one domestic industry utilizes the trade remedy laws and “impedes” another from continued access to illegally dumped inputs, however, is absurdity on its face.

There should be little question about the effect of revoking these orders.  While I understand that foreign producers are claiming that removing relief will have little or no impact on the market, I can assure you that is not what domestic auto makers are telling members of Congress.  To the contrary, they have strongly argued that removing relief would give them access to lower priced steel.  This is highly credible, in my opinion, as it is coming from sophisticated customers who know this market well.

It is also notable that domestic producers have made only the slimmest of profits during the period in which the Commission is examining.  Domestic auto companies have also created confusion among members of Congress by circulating materials claiming that the steel industry has been averaging profits of 12 percent in recent years.  Whatever that data relates to, it can not be the corrosion-resistant steel industry before you today.  As I understand it, the Commission’s own data shows that the domestic industry earned barely three percent in the period from 2000 through 2006, and has earned just over 5 percent during the improved market in 2005 and 2006.  In my view, these are insufficient margins to restore health to this highly capital intensive industry.

The fundamental tenet of this debate often gets lost in the halls of Congress and elsewhere.  This case is simply about whether or not the resumed dumping of corrosion-resistant carbon flat products will injure domestic producers.  The Department of Commerce has already determined that the dumping will continue. 

The Department of Commerce’s finding that dumping would continue did not surprise me.  Not because of the counterintuitive notion that steel-related trade remedy cases are somehow a conspiracy and injustice against steel consumers, but rather, as veteran observers of the global steel marketplace know well, the underlying distortion and government involvement in the steel market hasn’t changed one bit.  Taking the long view, it is obvious to me that if illegal dumping continues without remedy, injury to the domestic industry is certain; the only question is how devastating the injury will be.

This Commission is altogether too aware of how illegally traded steel products not only devastate the employers and employees of the industry, but also vast communities to which this industry is central to.  I believe the facts in this case present a situation where continued utilization of our trade remedy laws are warranted and prescribed.

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