And, I would point out that the other feature of this bill is that it does establish an import permit and monitoring program. Such a program was suggested earlier as something that would be very important in receiving timely import data.

So, I think this bill-maybe combined with elements that are in other bills before this Subcommittee will provide effective tools to address a very serious threat to the steel-producing unions, the management and to the United States. This crisis is a threat even to our defense capability because a viable steel industry is an important asset of any nation.

I thank you, Mr. Chairman, for holding the hearing and I look forward to action by your Subcommittee.

[The prepared statement follows:]

Statement of Hon. Ralph Regula, a Representative in Congress from the

State of Ohio

Mr. Chairman, Congressman Levin and Members of the Subcommittee, I want to thank you for scheduling this important hearing on steel trade issues. As Chairman of the Congressional Steel Caucus, I became concerned about the serious impact that the dramatic surge of steel imports was having on the steel industry and steel workers last September when the Steel Caucus held two days of briefings on this subject. The Caucus heard from CEO's from the large integrated companies, from the President of the United Steelworkers, and from CEO's representing the minimills, the specialty steel companies, and pipe and tube manufacturers.

The message from all, at that time, was that steel imports were pouring into the U.S. at unprecedented levels and that prices of these imports were extremely low. This surge of imports at very low prices was threatening the health of the industry and the jobs of its workers.

This became a fact after the following data was finally made available to the public. Steel imports from July through November 1998 were at all-time record levels: in July 4 million net tons of steel entered the U.S.;

in August 4.4 million net tons;

in September 3.8 million net tons;

in October 4.1 million tons;

and, in November 4 million net tons.

Although imports did decline somewhat in December of 1998 because of the impact of the preliminary determinations in the hot-rolled steel trade cases, the level of December steel imports was still 30 percent higher than a year before. And we ended 1998 with the highest level of imports ever-41.5 million net tons of steel mill products, which represents a 33 percent increase over 1997, which was also a record year.

These unprecedented levels of steel imports continue to threaten the health of an industry and the well-paying jobs of its workers. Since the import crisis began, over 10,000 steel jobs have been lost according to the Administration's steel report. Three companies have filed for bankruptcy protection. Other workers find themselves subject to short work weeks and on temporary lay-off. Suppliers and community businesses in the affected communities are also feeling the impact of these lost steel jobs.

As you know, the steel industry and steel workers went through a painful restructuring in the 1980s which saw employment drop from over 440,000 to around 180,000. The industry invested $50 billion in new plant and equipment and to develop new production techniques. The U.S. steel industry is today a world-class competitive industry. Steel workers have become the world's most productive in terms of man-hours producing steel and the industry is among the world's low-cost and most environmentally sound industries.

Why are these steel imports surging into the United States and threatening a highly competitive industry? Other nations have pursued industrial policies over the years that have built up a steel industry using trade protection and subsidies. This has resulted in a distorted steel market world-wide, and also in tremendous over capacity in steel production world-wide. Then you have the financial collapse in Asia, and economic crises in Russia and Brazil. These nations can no longer afford to buy steel or no longer have use for the quantities of steel they once did.

Because the U.S. continues to have an open market for steel-with low tariffs on steel and no substantial non-tariff barriers the steel that was once sold in Asia,

in Russia and in Brazil is now surging into the U.S., even though U.S. steel companies and steel workers are among the world's most efficient producers. In order to obtain hard currency, foreign companies continue to ship to the world's most open market.

We were told by the Administration, and I quote from the January 7th report on steel: "Free and fair rules-based trade is essential for both global economic recovery and for U.S. prosperity." But what we have seen since July 1997 when the Asian financial crisis began and the Russian economic crisis flared up has certainly not been "fair rules-based trade." This is confirmed by the overall steel import figures and by recent preliminary decisions in dumping cases that have found substantial dumping margins.

In view of this steel import crisis, I ask the Subcommittee to reexamine our overall trade policy. I would like to pose the following questions: As we provide nations in financial and economic turmoil with international monetary aid, should these nations be allowed to export their way our of their troubles, thereby threatening a basic industry in the United States? Why should an industry, such as the steel industry, which has modernized and down-sized to become world-competitive, now be put at risk because of outside factors over which it has not control? And, do we want to become a nation without any basic manufacturing capability, totally dependent on foreign supply for such basic materials as steel? Do we want to subjugate U.S. manufacturing jobs to foreign policy objectives when those objectives could be reached by other means? I believe that these are questions that we must address and which have been brought to the forefront by this steel import crisis.

I continue to urge the Administration to take additional and immediate actions to stop unfair steel imports under their existing authority. The Administration could self-initiate a Section 201 case and provide a comprehensive solution to this import crisis.

I also believe that it is time for Congress to reexamine this existing authority and ensure that the appropriate tools are available to the industry, to labor and to Administration officials. I have introduced legislation, H.R. 412, the Trade Fairness Act of 1999, which lowers the injury standard to bring it in accordance with the World Trade Organization (WTO) Safeguards Agreement. I would like to emphasize that this change is consistent with our WTO rules. Why should the U.S. law contain a higher injury standard that is required by international law?

Section 201 of the Trade Act of 1974 is the appropriate current law remedy accepted under our international obligations to stop import surges that injure a domestic industry. It allows a comprehensive approach to solving the problem. Under current law, if the International Trade Commission determines that an article is being imported into the United States in such increased quantities as to be a "substantial cause of serious injury" then the President can take appropriate action to ensure a positive adjustment to import competition.

Current law requires that imports are a “substantial cause of serious injury" to U.S. industry. Our WTO obligations require only that imports be a cause of serious injury. Therefore my bill would delete the term "substantial" from the causation standard in Section 201. Under current law "substantial cause" is defined as a cause that is important and not less than any other cause. My bill clarifies that in order to gain relief there only needs to be a causal link between imports and injury.

H.R. 412 also would include in U.S. law the factors to be considered by the International Trade Commission, as set forth in the WTO Safeguards Agreement, to determine whether the U.S. industry has suffered serious injury. These factors include: the rate and amount of the increase in imports of the product concerned in absolute and relative terms; the share of the domestic market taken by increased imports; changes in the levels of sales; production; productivity; capacity utilization; profits and losses; and, employment.

I am proposing these changes to Section 201, to restore the effectiveness of Section 201 and to once again make it a viable remedy against import surges. With this change to Section 201, the Administration could join with the Congress, industry and labor to rekindle the partnership that was so effective during the 1980's in rebuilding this vital industry, and come up with a comprehensive solution to stop this import surge. The remedy could encompass all countries that have been exporting large quantities of steel and all products that are affected. I should also make the point that these changes to Section 201 would be applicable to any industry that is being injured by import surges.

H.R. 412 has a second section which establishes a steel import permit and monitoring program. In order to gain relief under U.S. trade laws, domestic industries must demonstrate that unfairly traded imports have caused injury. This requires complex factual and economic analysis of import data. Under normal procedures, such data is not available to the public until at least 45 days after the data has

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Mr. LEVIN. I would now like to yield briefly, if I might, to the gentleman from Pennsylvania, our good friend, Representative Coyne.

Mr. COYNE. Thank you very much. First of all, I want to thank Chairman Crane and Chairman Houghton and yourself, Mr. Levin, for having given us the opportunity to examine the steel dumping problem in this hearing today. Few trade issues rise to the importance of steel dumping for the United States. The surge in foreign steel imports has seriously damaged the U.S. steel industry and put thousands of American steelworkers out of work.

Today's hearings are being held because of the dramatic increase in steel imports since July 1997. Imports of steel mill products increased by more than 32 percent between 1997 and 1998 and imports of hot-rolled steel products increased by nearly 75 percent over that 1-year period. Commerce Department figures released on January 28 indicated that steel imports declined dramatically in December 1998. Those preliminary figures indicated that steel imports dropped 32 percent from November's levels. Hot-rolled steel products, apparently, dropped even more between November and December.

But, that begs the question of whether there has been a dumping problem and whether that dumping has hurt American steelworkers and steel producers. Today, I hope we will hear more about the problems associated with dumping steel into the United States and also hear about some proposed solutions. Thank you very much.

Chairman CRANE. I now would like to yield to Mr. Houghton, who serves as Chairman of the Ways and Means Oversight Subcommittee, to make a brief opening statement.

Mr. HOUGHTON. Thank you very much, Mr. Chairman. I also want to thank you very much for having this hearing.

I am not going to dwell on my own particular feelings and philosophies here but I would like to make just a couple of points.

We certainly don't want to abrogate our responsibility with the WTO, World Trade Organization, and we certainly don't want to give a signal to other people that we are sort of drawing back into ourselves. But, at the same time, as we all know, freedom is only freedom as we are willing to give up some of it and that means to have some discipline. And that means that there is sort of a quid pro quo and the concept of free trade is that it doesn't always have to be in balance but it has to be nearly in balance and we don't want to have "otally "beggar thy neighbor" philosophy.

down one after the other after the other. Now, do we have a responsibility here? I really think we do.

One of the things that has always bothered me and we can talk to Ambassador Barshefsky later on-is that there hasn't been a single 201 case filed recently. This is not a 301 or a dumping case. This is the industry that is going out. Now, you can say, well, in a sort of macro sense, intellectual sense, that really isn't important because there is sort of a forced obsolescence here. Not so. I don't believe that at all.

I have been in an industry where the same thing almost happened to me and when people are going out of work and they are doing the best they can, that is when the U.S. Government has got to step in to help.

And I think the thing, Mr. Chairman, just in final, is that we have got to be sure we don't end up in this country-particularly in areas like steel-as the warehouse for a good we can't even afford to buy. So, I thank you very much and I appreciate the opportunity to let me talk.

Mr. LEVIN. Mr. Crane, if I might yield briefly to Mr. McNulty? Chairman CRANE. Certainly.

Mr. MCNULTY. Thank you, Mr. Levin, Mr. Chairman, and my colleagues. I want to express my deep concern about the crisis facing the American steel industry.

The continued dumping of steel is causing tremendous harm to the industry and forcing huge layoffs of hard-working U.S. steelworkers. Over 10,000 steelworkers had been laid off in the past year as a result of the flood of underpriced steel coming into the United States.

As we all know, America was built on the backs of laborers. We cannot turn our backs on them now. Although the actions taken by the steel industry and the administration have caused the amount of dumped steel to drop, more needs to be done. We need to be firm and make it very clear to our competitors that we will not tolerate illegal dumping of any kind.

American steel companies and organized labor have worked very hard over the last decade to restructure and to restore the integrity of this important industry. We cannot allow these sacrifices to be in vain.

Mr. Chairman, I am a cosponsor of Representative Visclosky's bill to reduce steel imports to 25 percent of the U.S. market. That is the level that prevailed in July 1997 before the illegal dumping began. I hope that this Subcommittee will adopt this measure in the near future.

Given the Nation's strong economy, now is the time to deepen our commitment to ensuring that working families keep the wellpaying jobs they deserve. Thank you, Mr. Chairman and thank you, Mr. Levin.

[The opening statement follows:]

Opening Statement of Hon. Michael R. McNulty, a Representative in

Congress from the State of New York

Mr. Chairman, I want to express my deep concern about the crisis facing our American steel industry. The continued dumping of steel is causing tremendous harm to the industry and forcing huge lay-offs of hard-working U.S. steel workers. Over 10,000 steel workers have been laid off in the past year as the result of the flood of under-priced steel coming into the United States.