KETS AND SUBSIDIZED INDUSTRIES NEED TO MAKE A SERIOUS COMMITMENT TO REFORM. OUR STEEL INDUSTRY HAD TO DO THIS IN THE 1980'S. THESE COUNTRIES NEED TO DO IT NOW. OUR STEEL INDUSTRY AND THE STEELWORKERS HAVE ALREADY GIVEN UP OUR POUND OF FLESH TO THE WORLD MARKET. AFTER WHAT WE WENT THROUGH IN THE 1980'S TO MODERNIZE, WE SHOULD NOT BE ALLOWING COUNTRIES WITH INEFFICIENT, SUBSIDIZED ECONOMIES TO PUT OUR STEEL INDUSTRY UNDER. WE DIDN'T GO THROUGH ALL THAT IN THE 1980'S AND COME THIS FAR ONLY TO SEE OUR STEEL INDUSTRY WITHER AND DIE IN THE MIDST OF A BOOMING U.S. ECONOMY.

CONGRESS CAN AND SHOULD ALSO TAKE STEPS NOW TO ENSURE FOR THE LONGER TERM THAT OUR TRADE LAWS WILL ENABLE US TO ACT MORE SWIFTLY TO PREVENT THIS KIND OF CRISIS FROM HAVING SUCH A SEVERE IMPACT ON OUR DOMESTIC INDUSTRY AND OUR STEELWORKERS AGAIN IN THE FUTURE.

I THEREFORE ALSO URGE THE COMMITTEE TO SUPPORT "THE TRADE FAIRNESS ACT," CONGRESSMAN RALPH REGULA'S BIPARTISAN BILL, OF WHICH I AM A COSPONSOR, THAT WOULD AMEND THE 1974 TRADE ACT TO LOWER THE INJURY STANDARD FOR A SECTION 201 CASE TO A LEVEL CONSISTENT WITH THE WORLD TRADE ORGANIZATION RULES. THIS WOULD ENABLE THE U.S. TO INITIATE A CASE UNDER SECTION 201 SOONER AND STOP THE IMPORT FLOOD SOONER. THE BILL WOULD ALSO ESTABLISH AN IMPORT MONITORING SYSTEM SIMILAR TO THAT OF CANADA AND MEXICO TO GIVE OUR INDUSTRY MORE IMMEDIATE ACCESS TO IMPORT DATA, WHICH WILL ALSO HELP TO ENABLE THE U.S. INDUSTRY TO REACT MORE QUICKLY TO IMPORT SURGES.

SO, IN CLOSING, WHILE WE STILL NEED TO KEEP UP THE PRESSURE ON THE ADMINISTRATION TO PRESS THESE COUNTRIES TO REFORM, AS WELL AS TO BRING ALL OF OUR TRADE LAWS TO BEAR ON THIS CRISIS, THERE ARE ALSO STEPS AS I'VE MENTIONED THAT CONGRESS CANAND SHOULD- -TAKE IMMEDIATELY THAT WILL SAVE OUR STEEL INDUSTRY IN THE SHORT TERM AND STRENGTHEN OUR TRADE LAWS IN THE LONGER TERM AS WELL AS SEND A MESSAGE TO FOREIGN COUNTRIES THAT THEY MUST MAKE GOOD ON THEIR PROMISES TO REFORM THEIR MARKETS.

I APPRECIATE THE COMMITTEE'S ATTENTION TO THIS ISSUE AND AM READY TO WORK WITH THE MEMBERS IN ANY WAY I CAN TO ACCOMPLISH THE GOAL OF ENDING THIS CRISIS IN A LASTING WAY AND PUTTING OUR STEEL INDUSTRY BACK ON FIRM FOOTING.

Statement of Hon. Robert W. Ney, a Representative in Congress from the State of Ohio

Let me first say, this issue today on steel must be framed correctly. It is not about free trade versus fair trade versus protectionism, it is about illegal dumping. As you know, steel producers in Japan, Russia, Brazil and others are facing drastically reduced demand both in their home markets and their traditional export markets. Their solution has been to unleash an unprecedented barrage of exports on the U.S. market. Unfortunately, these practices have placed America's domestic steel producers in peril. As a result, several U.S. steel industries have filed antidumping cases against Russia, Japan and Brazil. The cases have been filed because dumped and subsidized imports have surged in the last year, driving down prices and profits while stealing sales from U.S. producers.

With many economies around the world in disarray, many steel producing countries are trying to export their way out of their economic problems by illegally dumping steel onto the market. Unfortunately, these practices have placed America's domestic steel producers in peril. Now is the time to put the interests of American working families ahead of foreign governments.

Within the last few months, thousands of steelworkers have lost their jobs, small businesses are shutting down and local communities are being brutalized because our government refuses to put the interest of working people ahead of foreign governments. Every other country has taken measures to protect their steel market from these predatory and illegal dumping practices. It is long past time for our government to do the same.

With each passing day, more steelworkers lose their jobs, more local governments face declining tax bases, and more families face financial hardships. This needs to stop now. Our families deserve better from their government than being told to wait for further rulings in accordance with World Trade Organization laws. Let me be clear, the President could have stopped this months ago, and should do so now.

After several letters, meetings, and phone calls with the Administration, some action has been taken. Never the less, the response should have been taken in October of 1998. The United States Department of Commerce ruled on critical circumstances that Japan and Russia have been illegally dumping imported steel into our market. This ruling is not the official ruling of the original cases filed from the steel industries, however, it is a significant separate ruling that should now deter Japan and Russia from continuing their illegal dumping. This is only one little piece of the puzzle.

Second, the Commerce Department announced a tentative agreement with Russia on reducing their imports of Russian steel. Although, again this is another piece of the puzzle, this does not drastically help our steelworkers and steel industry. In all actuality, this agreement does not do much at all. The Russian Suspension deal limits the amount of steel it can ship here, however, the agreement enables Russia to continue to sell the steel below their costs and U.S. industry prices. In addition, the U.S. is suspending the trade case filed against them by the industries in exchange for the following:

• Stop hot rolled shipments to the US for six months

• Reduce hot rolled shipments to 825,000 tons per year for the next five years • Sell hot rolled at prices ranging from $231 to $254 per ton

While reducing imports sounds good, it really is not. Before the agreements, Russia was selling hot rolled around $210 per ton. Before the crisis, U.S. producers were selling hot rolled for $315 to $325 per ton. Russia will still continue to dump steel. The agreement also limits the amount of imports on 16 other Russian steel products. The amounts are based on 1997 levels which was a huge year for Russian exports. In 1997, Russia sent 3.3 million tons of steel to the U.S., double of what they shipped in 1995 and 1996, normal trading years. Virtually every steel company and union in the country is opposed to this agreement with Russia.

On February 2, 1999, I joined Congressman Peter Visclosky, Jack Quinn, and Dennis Kucinich in introducing legislation to freeze steel imports at pre-July 1997 levels. This legislation will do what President Clinton has not done, and that is stand up for our steelworkers and put America's interests first for a change. For too long, President Clinton has refused to take action as our steelworkers, our communities and our families have been brutalized by a flood of illegal steel imports. By freezing our level of steel imports at pre-1997 levels, we will tell the world that the United States refuses to be their dumping ground.

The Stop Illegal Trade Act (SISTA) has the support of nearly 200 Members of Congress including Democrats, Republicans, and Independents. If this bill is passed, the U.S. Customs Service will be required to stop the flow of steel into the U.S. market once the pre-1997 level of steel imports has been reached. The SISTA bill would go into effect immediately. It would limit steel imports from all nations on a monthly basis. These quotas will be phased out within three years. In addition to the SISTA bill, I have also co-sponsored other pieces of legislation to address the flood of illegal steel imports. This is a bipartisan effort within the House and the Senate. In closing, I would like to say our trade policy should be based on putting America's interest first. For months and months, our steelworkers, their families and their communities have been paying the price for irrational trade policies that put foreign governments and international financial interests ahead of America's working families. We have begun to make progress, but much more needs to be done. Under current law, President Clinton has the power to stop the flow of illegal imports and should act immediately. By placing tariffs or imposing a moratorium on illegally dumped foreign steel, our workers will be our top priority and have a level playing field against these unfair trade practices. I understand the President has concerns about the united States' perception around the world, but that should take a back seat to our responsibility to the working families of this country. Waiting for an international trade organization to rule on what we all know are blatantly illegal trade policies will destroy the lives of too many families for too long. If the President will not take action, then Congress must step forward. I urge the Committee to please consider and pass the Visclosky-Quinn-Ney-Kucinich resolution.

Statement of Hon. Jack Quinn, a Representative in Congress from the State of New York

Mr. Chairman and distinguished members of the Subcommittee I thank you for the opportunity to speak to you about the situation in which the Nation's Steel Industry now finds itself, due to the illegal dumping of foreign steel into the United States. The American Steel Industry is under attack. Illegal imports are flooding into our country at record breaking levels. No industry can compete against the flood of steel that has been dumped in our markets in the past year.

I represent the 30th District of New York (Buffalo and Western New York). My district still relies on the steel industry as a source of employment for thousands of hard working men and women. Over the past 20 years, Western New York has lost tens of thousands of jobs due to the closing of steel related industries. Before being elected to Congress, I served as the Supervisor of the Town of Hamburg. We lived through the closing of Bethlehem Steel, one of Western New York's number one employers. The closing of Bethlehem Steel and similar facilities in the Buffalo are had a very detrimental impact on our economy. People in Western New York are still feeling the affects of those shutdowns.

Buffalo is not alone. Similar communities throughout this great country of ours have experienced the same economic difficulties. We need to learn from our mistakes and stop this steel crisis before it has a more severe affect upon our industries, communities, and working families. Let what we learned yesterday in Buffalo and Western New York be lessons for us all today. We must end the unfair and illegal dumping of foreign steel into the United States before the damage becomes to great to repair.

This year alone, steel imports from Japan rose by 113%, from Korea by 90%, and from Russia by 45%. These are alarming numbers. Some foreign corporations in these countries are selling steel at $100 per ton less than it cost them to make it. The crisis has resulted in a 30% surge in steel imports and the loss of at least 10,000 jobs between the months of January and October. This number represents roughly 12% of all union steel workers, but does not reflect the many non-union or salaried workers who have also lost their jobs. Twenty-four workers lose their jobs everyday.

The steel industry lost 350,00 thousand jobs during the last steel crisis when it took 10 man hours to make one ton of steel. The industry modernized its plants and equipment and downsized. Now it takes 2 man hours for America's 170,000 steelworkers to make one ton of steel. The steel industry has greatly improved it's productivity. Since 1980 the steel industry's productivity has risen 240%. The industry and its workers have made strides to be the best steel producers in the world. We must not allow foreign countries to ruin the steel industry and cause the loss of thousands of jobs due mainly to the illegal dumping of steel into the United States. The steel crisis re-emerged in July of 1997. In 1998, 18 million tons of steel was imported into the United States. As a matter of fact, 56% more steel was poured into the United States in the third quarter of 1998 than during that same time in 1997. In comparison, the U.S. exported only 5.5 million tons of domestic steel. These numbers pail in comparison to each other.

The Administration may tell you that steel imports have gone decreased. They have fallen only slightly, yet still remain above pre-crisis levels. Hot rolled steel imports have increased 500% since 1995. Hot rolled steel imports from Russia, Japan, and Brazil captured over 25% of the domestic market in 1998. That is up almost 15% from 1997. The problem is not getting better it seems to be getting worse.

The U.S. Steel Industry adds $70 billion to the Gross Domestic Product (GDP). If the steel industry continues on the course it is presently there will be no doubt the GDP be affected. The negative consequences of this massive surge in dumped imports is evident in the market. Spot prices for hot rolled steel fell nearly 16%. Average prices from Russia, Japan, and Brazil were 10% to 27% below average prices of domestic producers, in the first half of 1998. For these reasons the United States Steel Industry net income declined nearly 60%.

What has been done to stop these imports from being dumped into the United States. The answer is not much. Section 201 of the Trade Act of 1974 gives the administration the ability to set quotas for each exporting nations guilty of violations such as the unfair dumping of steel. The Commerce Department has recently reached an agreement with Russia, that would reduce Russian steel imports by almost 70%. The suspension on Russian hot rolled steel is a step in the right direction and I applaud the administration for taking such strides.

However, further action must be taken. H.R. 506, the Stop Illegal Steel Trade Act (SISTA) would accomplish the goal of stopping illegal steel imports from entering the United States. I have become the lead Republican on this quota bill to help resolve the crisis. This bipartisan bill would stop the flood of illegally dumped foreign steel by freezing monthly steel imports at July 1997 levels. By rolling back the amount of still imported to pre-crisis levels, U.S. Steel companies can compete fairly in the domestic market and thousands of jobs would be saved.

Congressman Regula has also introduced legislation, the Trade Fairness Act of 1999(which I have co-sponsored), which will provide safeguards in current trade laws, specifically section 201. This bill will allow the president to impose duties and quotas, when an industry is injured by a surge of imports. The Trade Fairness Act will also establish a Steel Monitoring Program. The Steel Monitoring Program would more closely monitor the amount of foreign steel coming into the U.S. on a more timely basis and determine if the marketplace is being disrupted by unfair imports.

H.R. 506 is an immediate and short-term solution to the steel crisis. It has received bipartisan support in the House. Congressman Regula's bill also provides relief from the crisis. The Trade Fairness Act of 1999 is a long-term solution to the problem. It provides many safeguards against this happening in the future. The future is now and we must act immediately.

Once again, Mr. Chairman I thank you for allowing me the time to speak on such an important matter. I look forward to working with you on this issue.

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