Written Testimony of The Honorable Benjamin L. Cardin Submitted to the U.S. International Trade Commission Regarding the Five-Year Review of the Antidumping Order on Tin- and Chromium-Coated Steel Sheet from Japan (Investigation No. 731-TA-860)

Chairman Koplan, Vice Chairwoman Okun, and Members of the Commission, thank you for the opportunity to submit testimony concerning the Commission’s five-year sunset review on tin- and chromium-coated steel sheet from Japan.  On behalf of the thousands of employees at Mittal Steel USA’s Sparrows Point facility in Maryland, and at similar facilities across America, I urge you to continue the antidumping order on tin mill products from Japan.  Keeping the order in place will allow consolidation of the U.S. tin mill industry to continue in a rational fashion and prevent renewed injury from a flood of imports.   

I have long advocated for vigorous enforcement of U.S. unfair trade laws.  As a Member of Congress from a state that has a long and proud tradition of international trade and as Ranking Member of the Ways and Means Trade Subcommittee, I know how important these laws are to American manufacturers and workers.  Enforcement of fair trade laws goes hand in hand with efforts to liberalize trade – as we open the U.S. market to greater competition from abroad, we must fight even harder to ensure that everyone is trading by the rules.

Sunset reviews are an important element of U.S. trade remedy laws, as they demonstrate that the United States is committed to ensuring our trade laws are fair, even to producers in other countries that have engaged in dumping or benefited from subsidies.  America does not have an interest in keeping relief in place long after the conditions that created the justification for it have ended.

At the same time, it is important that the International Trade Commission not shy away from the important task at hand.  For decades, it has been unwavering U.S. policy – endorsed on a bipartisan basis by large majorities in both chambers of Congress – that U.S. businesses and workers should not be injured by unfair trade. Strict enforcement of U.S. trade remedy laws is critical.

I. Sparrows Point Facility

Since it was first constructed in 1887, the Sparrows Point plant has contributed to the economic health of the Baltimore region and the entire state of Maryland.  The facility injects about $1 billion each year into Maryland’s economy in the form of paychecks, pensions, purchases, and taxes.  More than 2,500 steelworkers currently are employed at the facility.  My congressional district also includes a large number of retirees who previously worked at Sparrows Point.  
The Sparrows Point facility is now state-of-the-art, as a result of about $1 billion on upgrades and modernizations in the past 10 years.  Today, the plant produces hot-rolled sheets, cold-rolled sheets, galvanized sheet, and semi-finished steel, along with tin mill steel.  The streamlining of production at the plant has significantly improved worker productivity.  In 2005, more than three million tons of steel were shipped to customers in the container, automotive, construction, appliance and steel services industries. 

Sparrows Point is the only integrated steel mill on the east coast of the United States equipped with deep-water docking facilities, and provides excellent access to railways and major roads.  I also am proud to say that Sparrows Point is one of the largest integrated steel mills in the country. 

I am grateful, as are my constituents, that since Mittal Steel USA purchased Sparrows Point in 2005 from International Steel Group (ISG), it has committed itself to the Baltimore area for the long term.  I also am pleased that the United Steelworkers and Mittal USA have both expressed support for the continuation of the antidumping order on tin mill products from Japan.  Mittal and the United Steelworkers understand that if the order were to terminate, the industry would be faced with surges of imports from a highly distorted market with significant excess capacity.  This type of labor management cooperation will help ensure that the American steel industry remains competitive over time.

II. Antidumping Order on Tin- and Chromium-Coated Steel Sheet

I have participated in many hearings at the ITC over the years and I am a strong congressional proponent of the U.S. trade remedy laws.  Our antidumping and countervailing duty laws are vital to the maintenance of a viable U.S. industrial base, along with high wage, high skill manufacturing jobs.  Our trade remedy laws simply level the playing field so that U.S. producers and their workers do not face unfair trade practices from abroad.  The antidumping order on tin mill products from Japan is a textbook example of the importance of these laws.

In the late 1990s, the tin mill operations at Sparrows Point were in jeopardy as imports from Japan increased 86 percent.  Then, in 2000, the Commerce Department found that the imports of tin mill products from Japan were being sold at less than fair market value, and the ITC found that these dumped imports were injuring the U.S. tin mill industry.  As a result, the Department of Commerce imposed 95 percent duties on Japanese tin mill imports.   

Despite the relief provided by the order imposed in 2000, the U.S. tin mill industry remains in a fragile situation today.  While productivity has increased 65 percent in the U.S. tin mill industry since 2000, it is clear that the industry remains injured.  Jobs are down 35 percent, and U.S. production of tin mill is down nearly 18 percent since 2000.  At the same time, production in Japan has declined since 2000, and excess capacity has increased.  Capacity utilization fell from 87 percent in 2000, to 78 percent in 2005.  Japanese shipments are down in the home market, as well as all export markets.  Thus, there is a great potential for an export surge to the United States if this order were lifted. 

III. Conclusion

I believe in fair and free trade.  Free trade means living within the framework of both the U.S. trade remedy laws and the world trade regime.  America’s trading partners must live by the rules.  When our trading partners or their companies flood U.S. and global markets with dumped or subsidized products, their behavior must be corrected.  When injury occurs, penalties must be imposed and the harm redressed.  

U.S. anti-dumping and countervailing duty laws keep vital jobs and production in the United States.  Our unfair trade laws are critical to maintaining the U.S. consensus in favor of free trade.  Without active enforcement of these laws, long-term public support for the World Trade Organization and other trading arrangements would be in jeopardy.   At a time of record trade deficits, $724 billion overall and more than $200 billion with China alone in 2005, the ITC’s role in ensuring that U.S. trade remedy laws are effectively enforced is more vital than ever for U.S. companies and their workers.

The case that you are considering today affects a significant part of the Baltimore region’s industrial base.  High-wage, high-skill jobs in our state are in jeopardy.   Other tin mill producers across America face similar concerns.   As the Commission conducts its investigation, I urge you to recall the fundamental importance of this proceeding to the proper functioning of the rules-based global trading system and to properly and fairly apply U.S. law.  In my view, a fair application of the law leads to a clear outcome – continuing the order against tin mill products from Japan to ensure that the U.S. steel industry will not be injured further by unfairly traded imports. 

Thank you again for the opportunity to provide this testimony.