not go far enough. Instead of continuing to talk and monitor import data, as Ambassador Barshefsky has stated, the Administration should aggressively pursue negotiated agreements with countries to achieve a global, comprehensive resolution to the surge of cheap steel imports.63 As a stick in their negotiations, the Administration can point to one bill that provides a quantitative solution to the matter-H.R. 506, the Stop Illegal Steel Trade Act (SISTA).

The tentative agreement the Commerce Department reached with Russia, if it is finalized, is a good example of what the Administration might accomplish when Congress pushes it into action with strong steps of our own. Through its use of quotas and bans that apply to all steel products from Russia, rather than just one or two, the Administration is following the Visclosky-Traficant approach to end this crisis.64 However, the Russian steel deal is only one step in the right direction. Its sets quotas that are too high and minimum prices that are too low. It is clearly not a solution that is fair to the steel industry or to steel workers.

H.R. 506, THE STOP ILLEGAL STEEL TRADE ACT (SISTA)

SISTA, bipartisan legislation cosponsored by over 170 members of Congress, requires that the Administration return steel imports to the pre-surge levels of July 1997. How the Administration gets there is entirely up to the President and his advisers. The bill explicitly provides for tariff surcharges, VRAS, and quotas. These measures, arguably, violate the WTO's general prohibition on unilateral antidumping measures without first meeting certain established criteria.65 However, the House of Representatives is already on record as supporting measures to end the steel crisis that do not comply with the WTO.66 H.Res. 598, sponsored by Congressman Traficant, expressed the sense of the House that the Administration should ban steel imports from countries who are not abiding by our trade agreements with them due to illegal dumping.67 The measure passed overwhelmingly in the 105th Congress, 345 to 44.68 Furthermore, neither Russia nor Ukraine, both of whom are major participants in the steel surge, are members of the WTO. Consequently, such measures do not apply, even theoretically, to those countries. For WTO members whose flood of exports will be stemmed by this bill, the WTO's dispute settlement system is well-equipped to deal with their complaints. Meanwhile, America's market and, most important, steel workers' jobs, will no longer be threatened.

Ambassador Barshefsky was right when she said we should not stop imports for reasons other than unfair trade.69 If the Administration wishes to avoid meeting other nations before a WTO hearing panel, it can find a way that is WTO-compliant to bring this crisis to a close. SISTA gives the Administration permission to "otherwise" ensure that the volume of steel imports does not exceed pre-surge levels.70 Personally, I would welcome any action by the President that made SISTA a moot issue because that would mean we have reached an end to the crisis facing tens of thousands of American steel workers. Until that time, SISTA stands by to do what the Administration cannot-defend an industry vital to our national security, and tens of thousands of American jobs, from attack by a tidal wave of illegally dumped, cheap foreign imports.

Thank you, Mr. Chairman.

ENDNOTES

1. Department of Energy, Office of Industrial Technologies, Steel Industry Profile.

2. American Iron and Steel Institute, “A Few Facts About Steel."

3. American Metal Market, "Defense Ponder's Steel's Wartime Readiness," March 14, 1994. 4. U.S. Senate Steel Caucus hearing on the impact of foreign steel on the U.S. market, November 30, 1998.

5. Information from the House Army Liaison Office, February 22, 1999.

6. Paul Barton, "Getting Troops Home a Challenge Itself," Arkansas Democrat-Gazette, May 21, 1991.

7. U.S.S. Nimitz Public Affairs Office, January 28, 1999.

8. Vago Muradian, "Douglass to Industry: Štart Planning for the Next Century," Defense Daily, September 24, 1998.

9. Greg Mastel, "Leveling the Playing Field: Antidumping and the U.S. Steel Industry," Economic Strategy Institute, February 1999.

10. Ibid.

11. Greg Mastel, "Russia, Steel, and U.S. Policy," The Journal of Commerce, January 4, 1999. 12. Mastel, February 1999.

13. Ibid.

14. Ibid.

15. Chimerine, June 1994.

16. Ibid.

17. American Iron and Steel Institute Press Release, February 19, 1999.

18. Ibid.

57-306 99-2

19. Ibid. 20. Ibid.

21. Ibid.

22. Mike Boyer, "AK Steel Rolling Against Trend," Cincinnati Inquirer, November 7, 1998. 23. Paul Blustein, "Steel From Japan, Brazil Facing Punitive Damages," Washington Post, February 13, 1999.

24. Ibid. 25. Ibid.

26. Michael Kepp, "Brazil Seeks Steel Deal with U.S.," American Metal Market, February 22, 1999.

27. Leslie Wayne, "American Steel at the Barricades," New York Times, December 18, 1998. 28. Michael Lelyveld, "U.S. Steelmakers Go on the Import Offensive," Journal of Commerce, October 26, 1998.

29. Len A. Costa, "U.S. Manufacturers Propose a Steely Ban," Fortune, February 15, 1998. 30. "Suit Alleging Steel Dumping on Commerce Dept. Fast Track," Legal Intelligencer, November 12, 1998.

31. Testimony of George Becker before the U.S. Senate Committee on Finance, January 27, 1999.

32. Chimerine, June 1994.

33. Congressional Research Service.

34. Chimerine, June 1994.

35. Chimerine, June 1994.

36. Ibid.

37. Mastel, January 4, 1999.

38. Chimerine, June 1994.

39. Mastel, February 1999.

40. Department of Energy, Talking Points for Steel Vision Press Conference, May 2, 1995. 41. Steel Recycling Institute, Recycling Fact Sheet.

42. Ibid.

43. DOE Talking Points, May 2, 1995.

44. Recycling Fact Sheet.

45. DOE Talking Points, May 2, 1995.

46. Chimerine, June 1994.

47. Ibid.

48. Greg Mastel, “Antidumping Laws and the U.S. Economy," Economic Strategy Institute, 1998.

49. Arlene Wilson, "Antidumping and the Uruguay Round: An Overview," CRS Report for Congress, January 25, 1995.

50. Mastel, 1998.

51. World Trade Organization, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1994.

52. World Trade Organization, "Settling Disputes: The WTO's 'Most Individual Contribution"," 1997.

53. Testimony of U.S. Trade Representative Charlene Barshefsky before the U.S. Senate Committee on Finance, January 26, 1999.

54. World Trade Organization, Overview of the State-of-Play of WTO Disputes, February 17, 1999.

55. Costa, February 15, 1999.

56. Jack Lucentim, “Rubin Defends Imports as Steel Trade Surges," Journal of Commerce, December 9, 1998.

57. Blustein, February 13, 1999.

58. Barshefsky, January 26, 1999.

59. Ibid.

60. Report of the President to Congress on the Steel Crisis, January 7, 1999.

61. Department of Commerce, Press Release, February 22, 1999.

62. Kepp, February 22, 1999.

63. Barshefsky, January 26, 1999.

64. H.R. 506 and H.R. 502.

65. WTO, Article VI of GATT, 1994.

66. H.Res. 598, Roll Call #532, October 15, 1998.

67. Ibid.

68. Ibid.

69. Blustein, February 13, 1999.

70. H.R. 506, Section 1.

Chairman CRANE. Thank you, and our next witness is Mr. Trafi

cant.

STATEMENT OF HON. JAMES A. TRAFICANT, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Mr. TRAFICANT. Thank you, Mr. Chairman. I would ask that my statement be incorporated into your record.

Chairman CRANE. Without objection, so ordered.

Mr. TRAFICANT. I would like to talk about this in a little bit of a different vein, talking about GATT and the World Trade Organization. Our policy so far I think has been misguided and it's hurt our industry.

America has taken Europe to GATT over beef and over bananas. GATT ruled in our favor. Europe laughed in GATT's face. GATT referred us to WTO. WTO ruled in both cases in our favor. Europe laughed at WTO's ruling, then later appealed it. In the process is now a reference back to GATT which will be about a 3-year malaise over bananas and beef.

For every head of cattle we export, we are importing 11. We exported 44,000 hogs and imported a half a million. Hogs are selling for 8 cents a pound.

I am talking about GATT. The dilemma bananas and beef posed were nonmilitary, so we didn't have much of a choice. Now, in October, we passed a ban in the House as a nonbinding resolution. Japan's exports to American steel dropped 22 percent. I recommend you bring out the Visclosky bill but you allow the Traficant amendment to be offered on the floor, which is simply a 3-month ban.

I want to read this to you. In article 21 of GATT, it states, "nothing in this agreement shall be construed to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and material as it carried on directly or indirectly for the purpose of supplying a military establishment."

Steel is not styrofoam. We are clearly in our rights to take a stand legally in the world and my bill just calls for a 90-day ban. I don't care what the final workout is because I know in 90 days this problem will be solved. You do not regulate illegal trade, you do not manage it, coordinate it, or massage it with international bodies. You ban it.

That is my feeling very strongly here. And I believe we have delegated the role of Congress, constitutionally mandated with the power to regulate commerce with foreign nations, and given it to the White House. And they are playing politics with it. As a Democrat, I will say that. They have been weak.

But, I want to let this panel know that in the negotiated voluntary agreement with Russia there is a 6-month moratorium on this steel-too little, too late. My legislation speaks right to the core. I want an opportunity for an amendment to whatever vehicle you bring out to present this argument. I think it needs to be heard on the floor of the House.

I thank you.

[The prepared statement follows:]

Statement of Hon. James A. Traficant, Jr., a Representative in Congress

from the State of Ohio

Mr. Chairman, Mr. Vice-Chairman and Members of the Committee. I ask that my written statement be submitted for the Record.

THE IMPACT OF STEEL DUMPING ON U.S. STEEL PRODUCERS, STEELWORKERS AND THE U.S. ECONOMY

U.S. steel companies have transformed themselves. I believe that statement is of utmost importance in understanding. The U.S. steel industry is no longer the inefficient, uncompetitive entity it was in the 1970s. I am not here today to ask for special favors to save a dying American industry. The truth is, the U.S. steel industry underwent a painful restructuring in the 1980s-losing hundreds of thousands of jobs and investing over $50 billion into new technologies, equipment and facilities. Millions have been expended to retrain steelworkers. As a result, U.S. steel companies are technologically-advanced, remarkably competitive, and employ some of the most highly-skilled workers in the world today.

The question is, Mr. Chairman, why are we here today? If we have a world-class steel industry and world-class workers, why is the U.S. steel industry not turning out so much as a simple profit during a time of record steel demand and consumption in the United States?

The answer is simple. Our foreign competitors have been dumping steel in America below market value for well over a year. This practice, which has been allowed to continue unencumbered by the Clinton Administration, has had a devastating effect on the U.S. steel industry and U.S. steelworkers.

The numbers are incredible. In 1997, imports of hot-rolled carbon steel flat products averaged approximately 525,000 tons per month. In 1998, monthly imports averaged almost 1 million tons per month. The surge was concentrated in the last half of the year, which led to sharply falling prices and shipments by domestic producers. Similarly, hot-rolled steel imports averaged 676,000 tons per month from January to June, but then exploded to an average monthly rate of 1.3 million tons from July to November. November 1998 imports reached an all time record of 1.6 million tons, capturing over 55 percent of the American market that month.

Japan alone accounted for 41 percent of the import surge in the first 11 months of 1998. Russia and Korea accounted for another 38 percent. By product group, hotrolled sheet and plate-in-coil accounted for almost 50 percent of the volume surge in 1998. However, import surges are clearly not limited to the three countries and two products that are on everyone's lips. Steel dumping has become a global event. For example, in the first 11 months of 1998, steel imports were up 167 percent from Japan, up 60 percent from Russia, and up 112 percent from South Korea. But during that same time period, steel imports were also up 68 percent from the Ukraine, up 150 percent from Australia, up 105 percent from South Africa, up 114 percent from Brazil and up a whopping 586 percent from Indonesia. Dumping is dumping, Mr. Chairman. Our laws should be enforced across the board. Why isn't the Administration looking at all potential violators?

What impact has steel dumping had on an industry vital to U.S. national security? It's not just that U.S. steel companies aren't turning a profit during a time of record demand and consumption-U.S. steel companies are posting devastating losses. For example, Bethlehem steel reported a $23 million loss for the fourth quarter of 1998, compared to the net income of $42 million for the same quarter in 1997. Bethlehem is just a snapshot of a widespread problem. Ongoing unfair trade practices have cost 10,000 steelworkers their jobs and threatened the job security of many thousands more. Ten thousand lost jobs over two months translates into 860,000 hours of lost earnings. With an average hourly wage rate of $18.25, that's $16 million in lost wages. That's not just a $16 million loss to the U.S. economy. How much will the federal government pay out in unemployment compensation and job retraining, or worse-welfare, housing vouchers, and Medicaid? These men and women aren't hopeless or helpless. They are highly-skilled, well-trained, hard-working, law-abiding, taxpaying citizens.

The Effectiveness of U.S. Trade Laws

U.S. trade laws have been of little help in resolving the ongoing import surges quickly, or with any sense of urgency. While the Administration has taken action to expedite the antidumping petitions, the process continues to be multi-leveled, complicated and exceedingly slow. I have been told that the entire process is expected to persist a minimum of nine months, from start to finish. However, a lengthy investigative process is only one facet of our trade law effectiveness prob

lem.

There is one overreaching problem that the U.S. steel industry, steelworkers amd Members of Congress have run into like a brick wall: it is the Administration's unwillingness to enforce the law.

First, the steel dumping investigation has been focused on three countries: Japan, Russia and South Korea. Granted, these three countries are responsible for approxi

mately 79 percent of the steel dumping. But what about the other 21 percent? Why are we not pursuing these violators-violators that account for one-fifth of all steel dumping?! Similarly, just as steel dumping is not limited to three countries, it is not limited to two products. If all but a few countries and products are ignored with respect to steel dumping, what does this say about the quality of enforcement? It seems clear that our trade laws are not equally enforced and violators not ardently pursued.

Second, if enforcement of our trade laws is inconsistent and uneven at best in an officially-requested investigation and highly-publicized case, what is the quality of enforcement when an a antidumping petition has not been filed? In other words, is the U.S. steel industry case purposely being mishandled, or is this the best the federal government is capable of when called upon? Not much of a choice, is it?

Let's look at a similar case, to illustrate my point. While the White House continues to drag its feet on steel, U.S. Trade Representative Charlene Barshevsky said the United States is going to the mat with the European Union-over bananas. That's right, the Administration has drawn up a list of goods-from cashmere sweaters to pork and pasta-on which to impose 100 percent additional tariffs totaling $520 million a year, to force the EU's hand on bananas. Think about it. While Uncle Sam is prepared to wage a trade war over bananas, 10,000 steelworkers are receiving unemployment compensation.

Finally, and most importantly, this Administration would rather negotiate empty promises than enforce our trade laws. U.S. trade laws were designed by Congress to protect our economic and national security and our sovereignty. However, it has become obvious to me that this Administration is unwilling to take the type of definitive action necessary to deal with this serious crisis. The voluntary restraints the Administration has asked of Japan is like putting a kid in a candy store and asking him not to eat. No disincentives, no repercussions-it's strictly voluntary, Promises won't help the 10,000 steelworkers who have lost well-paying jobs and promises won't stop industry giant Bethlehem steel from closing the doors on two of its plants, and neither will $300 million in tax relief.

While I support relief for the steel industry, I am livid that the President expects the American taxpayer and the steelworkers who have lost their jobs to pay for the illegal actions our foreign competitors. Perhaps if the Administration enforced our trade laws for a change, and penalized dumping, we would collect enough revenue to pay for tax relief for our domestic steel industry.

H.R. 502/FASTA, the "Fair Steel Trade Act"

The time for negotiating, monitoring and litigating are long past. Tax breaks and retraining will not bring back good-paying manufacturing jobs and industries vital to our national security. It's time to stop the feet dragging and do something FASTA!

My bill, H.R. 502, the "Fair Steel Trade Act" (FASTA), would force the Administration to impose swift and severe penalties on those countries that have flagrantly and repeatedly violated our trade laws. Specifically, FASTA will impose a threemonth ban on imports of steel and steel products from Japan, Russia, South Korea and Brazil.

FASTA is strong, fast and to-the-point. Our trade laws are exceedingly slow and not equitably enforced by the Administration. Negotiations are at best a drawn-out process, and at worst, a handshake of empty promises. America's steel industry and steelworkers need our help now. The message FASTA sends is the Congress of the United will not tolerate illegal trade practices.

On the one hand, FASTA's moratorium has been criticized as being unreasonable and in violation of the General Agreement on Tariffs and Trade (GATT) by free traders. On the other hand, the ban has been challenged by pro-steel supporters for being too short, and therefore, ineffective. I would like to address both criticisms. First, a total, but temporary ban on steel is not an unreasonable action. FASTA calls for a three-month ban on steel. I found it interesting that the Clinton Administration recently negotiated a six-month moratorium on hot-rolled steel productstwice the length of the FASTA-in its agreement with Russia. That is precisely the type of action I and many in Congress have been advocating for months.

Second, some Members of Congress are worried that FASTA will violate the principles of GATT. The truth is, Japan, South Korea, Brazil1 and numerous other cosigners of GATT have violated GATT by dumping steel in America below market value. As such, FASTA is not a precedent-setting measure. Our trading partners

1 Russia is a special case. Since Russia is not a co-signor of GATT or a member of the World Trade Organization (WTO), the United States and Russia are not violating the principles of GATT.