have restricted U.S. imports based upon national security or health and safety principles for years. In fact, Section XXI of GATT, entitled Security Exceptions, makes exceptions for trade measures taken in the interest of national security. Specifically, Article XXI of GATT states, "Nothing in this Agreement shall be construed...(b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests...(iii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment [emphasis added]." The U.S. steel industry, a direct and indirect supplier of materials used in maintaining implements of war-unarguably-is an industry vital to U.S. national security. If our trading partners want to challenge FASTA's national security claims, they are welcome to do so at the WTO.

Third, FASTA is not meant to start a trade war, hence the three-month ban. It is merely a tool to allow the U.S. steel industry to recover while giving the Administration time to: 1) expedite these antidumping petitions through the investigations process, and 2) negotiate import agreements on steel. FASTA also gives Congress an open window of opportunity to propose and enact substantive trade reform legislation. In fact, FASTA is part of my two-pronged approach toward ensuring that U.S. trade laws are more responsible and accountable to U.S. industry. Within a month, I plan to introduce a comprehensive trade reform bill that will have a positive, long-term effect on American industries and American workers.

Finally, FASTA's three-month moratorium has been criticized by some as not being long enough to have any effect. I strongly feel that FASTA is a wake-up call to countries that continue to engage in unfair and illegal trade activities, without causing undue financial hardship. I believe that the United States and our trading partners can reach an understanding in three months time. Anything longer is protectionist. In terms of long-term effectiveness, it is imperative that Congress enacts comprehensive trade reform legislation and stops patching the holes with band-aidtype measures.

Conclusion

In his Presidential campaign, Bill Clinton spoke of using U.S. trade policy to build a bridge to the 21st century for American workers. Mr. Chairman and Members of the Committee, that bridge is crumbling under the weight of millions of tons of illegally dumped foreign steel. I say to you today: If Congress does not take extraordinary and decisive action, hundreds of American communities and thousands of American families will enter the 21st century in poverty.

Thank you.

Chairman CRANE. Thank you. We want to make sure that “traffic can't come in," right? [Laughter.]

Mr. TRAFICANT. Just allow it as an amendment and you can bring out whatever you want, Mr. Chairman.

Chairman CRANE. OK.

Mr. Greenwood.

STATEMENT OF HON. JAMES C. GREENWOOD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. GREENWOOD. We want to make sure the traffic can't come in as long as it doesn't come in "by crane." [Laughter.]

Thank you, Mr. Chairman, for giving me the opportunity to testify. The first several pages of my testimony spell out the problem and you don't need to hear that from me. You have heard it enough and you will hear it a lot more. Instead, I want to just focus briefly on solutions.

Mr. Chairman, I am a fair trader, I am not a free trader. I have supported NAFTA, the North American Free Trade Agreement, strongly, I have supported GATT, I am a supporter of fast track, and year after year, as the union members from my district have visited me in my office, they have argued against these policies. I

have defended these policies, explaining the importance of America being an exporter and the number of jobs created because of our openness to trade. But I can't look my 300 laid-off steelworkers in the eyes anymore and tell them that there is nothing wrong with the system. I can't defend the system as working for them.

We don't need to throw it out but we need to make some changes. I am a cosponsor of the Regula bill. I think that bill ought to be brought straight to the floor. It does improve the system and it improves it significantly.

I also today, after a lot of anguish and a lot of research, became a cosponsor of Mr. Visclosky's bill, H.R. 506, because I believe the foreign countries have broken our trade laws and they have caused American steelworkers to lose their jobs.

I would, however, like to work with the sponsors of the legislation to clarify the intent of the legislation to ensure that it does not violate WTO safeguard regimes and I think that that's possible. In its present form, the bill could be interpreted to leave that opportunity open-to be inconsistent with WTO-but I believe that the bill could be amended slightly to make sure that it does not violate the safeguards of WTO. That's a possibility.

I also would like to add that under section 201 of the Trade Act of 1974, the International Trade Commission may conduct an investigation upon receipt of a petition from numerous sources, including a resolution of the House Ways and Means Committee. I think it was Mr. Houghton who wondered why 201 had not been invoked. This Committee can invoke it, the administration can invoke it, the requisite Committees of the Senate can invoke it. I am not clear on why the industry or the unions have not invoked the protections that are available to them under 201. Following an affirmative injury determination, the Commission may recommend a duty, a tariff rate quota, or other appropriate remedy in a way that does not run afoul of the procedures set forth by the International Trade Commission.

I believe that the administration must be more aggressive in its discussions with our trading partners, they must understand that our patience and forbearance are not inexhaustible and that the continued practice of dumping steel into our market in violation of bona fide trading agreements risks bringing a less measured and a more protectionist response from this Congress and from the American people. I urge this Subcommittee to impress upon the administration the need to make illegal dumping a priority in any bilateral or multilateral discussions we have with our trading partners around the world.

While I appreciate the administration's reluctance to be overly harsh with emerging democracies-most notably, Russia-suffering from a cash-starved and a troubled economy, the time has come to make it clear to Russia that membership in the WTO will not come until it commits itself fully to responsible trading practices.

And finally, I believe we in Congress have an opportunity in the new round of trading talks in Seattle to send a strong message to our negotiators that the issue of ending the practice of illegal dumping must be one of our highest priorities. And I thank you again for the opportunity to come forward and I yield back. [The prepared statement follows:]

Statement of Hon. James C. Greenwood, a Representative in Congress from the State of Pennsylvania

Good Afternoon, Mr. Chairman, distinguished members of the Ways and Means Subcommittee on Trade. Thank you for convening this hearing.

Today, you will hear from an array of witnesses on the real and present danger our domestic steel industry faces from the unfair trading practices of countries in South America, Europe and Asia.

These practices are no longer in dispute. They are well documented by the International Trade Commission and the U. S. Department of Commerce. In fact, just last Friday, Commerce issued a preliminary determination against Brazil and Japan, finding high dumping margins for both these nations. Significant subsidization of imported steel products was also identified in Brazil.

This was not a surprise to anyone participating in or observing the U.S. steel market. Last November, President Clinton noted that our country had just experienced a one-year 300 percent increase in imports of hot-rolled steel from Russia and a 500 percent increase in hot-rolled steel from Japan.

Five days later one day before Thanksgiving-the impact of this unprecedented dumping of steel hit my district.

Three hundred of the men and women employed by U.S. Steel at the Fairless Works were notified that they would be laid-off indefinitely. Altogether, an additional thousand Fairless jobs will be at risk if this crisis is allowed to continue unabated.

Ironically, the seeds of this crisis were sown over the past decade and a half, as our domestic steel industry undertook the most expansive restructuring in the history of any basic industry. In the early 1980's, suffering huge losses from_aging plants and equipment, big steel nearly surrendered its competitive edge to foreign producers and thousands of American steelworkers left the mills forever.

But domestic producers fought back. By the middle of this decade, with billions invested in new plants, equipment and employee training, our domestic steel producers recaptured their place as the world's most competitive steel manufacturers. In product quality, customer service and productivity, no one ranks higher.

Yet, while our steel producers were bringing new and environmentally compliant steel facilities on-line, many of our trading partners continued to retain excess capacity through government subsidies. They relaxed environmental standards for older plants on the one hand and imposed import barriers on the other. Today, the amount of excess capacity worldwide may be as great as 300 million tons. That is roughly one-third more steel making capacity in any year than world markets could possibly absorb.

Due to the current growth in the U.S. economy, demand for steel is strong and there has been no shortfall in the ability of our domestic steel industry to provide high quality products for its customers in the quantities needed. Still, the volume of imported steel reached historic proportions in 1998, even as prices for imported steel plummeted nearly $100 per ton last year.

The effects at home have been devastating. Thousands of layoffs, families and communities shattered, and an increasing number of bankruptcy filings have come in the wake of this import tsunami.

Equally disturbing to me is the time it takes to identify and punish these steelmaking predators. In the case being reviewed by the Administration-one that was brought last September-a final injury determination is not expected until June, nearly three quarters of the business cycle.

Before WWII, when President Franklin Roosevelt first explained why the LendLease program was important in the fight to save Europe, he used the analogy of the "good neighbor." A good neighbor, he observed, would certainly lend a hose to a neighbor whose house was on fire, even if he himself didn't join in to extinguish the fire. I wonder what President Roosevelt would have thought of a neighbor who responded to the urgent call by remarking that he would first have to undertake a lengthy six-step investigation to determine if his neighbor's house were actually on fire and then develop an appropriate form of relief.

Sadly, we are the reluctant neighbor under existing trade laws. To me, it seems unfair to our vital interests.

Instead of rewarding American industries that have met the challenge of global markets by becoming leaner, environmentally cleaner and more competitive, we punish them and ourselves by allowing subsidized products, produced under questionable environmental standards, to flood our markets while our government painstakingly crosses its bureaucratic "t's" and dots its regulatory "I's."

Our basic industries cannot hope to remain strong if our trading partners are allowed to dump their excess capacity on our shores at prices that fail to reflect the

genuine cost of production. We need to remind our partners that our commitment to free and fair trade rests on the innate sense of fairness in the American people. If these kinds of unfair practices go unchanged, the American people may decide they have seen enough, risking retaliatory measures and trade barriers that no reasonable person wants.

The Regula bill, of which I am a cosponsor, is a responsible first step to providing timely relief to our domestic steel producers. By harmonizing injury standards with the World Trade Organization (WTO) rules, we will significantly strengthen our ability to address these dumping cases. The development of a steel import-monitoring program, envisioned in the proposed legislation, is also an important new tool in our efforts to fight illegal steel dumping.

Further, the Administration must be more aggressive in its discussions with our trading partners. They must understand that our patience and forbearance are not inexhaustible and that the continued practice of dumping steel into our market, in violation of bonafide trading agreements, risks bringing a less measured and more protectionist response from this Congress and the American people.

I urge this Committee to impress upon the Administration the need to make this issue of illegal dumping a priority in any bilateral or multilateral discussions we have with our trading partners around the world.

If we do not get an adequate response from the WTO and our bilateral negotiations, then we will be forced into unilateral steps to protect American interest.

And while I appreciate the Administration's reluctance to be overly harsh with emerging democracies suffering from a cash-starved and troubled economy, the time has come to make clear that the membership in the WTO will not come until they commit themselves fully to responsible trading practices.

Finally, I believe we in Congress have an opportunity in the new round of trading talks to send a strong message to our negotiators that the issue of ending the practice of illegal dumping must be one of our highest priorities.

This November, when all our families gather to give thanks to God and our nation for our prosperity, I want the hardworking men and women at the Fairless Works, and at steel mills across this country, to be able to give thanks that we in this Congress took the wise and responsible actions needed to enable them to return to their jobs.

Again, thank you for this opportunity to testify before your Committee this after

noon.

Chairman CRANE. Thank you very much, Mr. Greenwood.

And now, if you folks would retire to the row behind you, I would like to call our next panel to testify.

Hon. Ron Klink, Hon. Jack Quinn, Hon. Bart Stupak, Hon. Stephen Buyer, Hon. Michael Doyle, Hon. Marion Berry, and Hon. Dennis Kucinich.

And I will remind all of you to please keep your oral presentations to 5 minutes or less. You can watch the light in front. When it turns red, that's 5 minutes and any printed statements will be made a part of the permanent record. And, I would ask that you proceed in the order I presented you.

Mr. Klink will go first.

STATEMENT OF HON. RON KLINK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. KLINK. Thank you very much, Mr. Chairman. I would ask again for unanimous consent that my entire statement be put into the record and I be able to talk extemporaneously for furtherChairman CRANE. All of it.

Mr. KLINK [continuing]. Or less if it's your pleasure.

Let me just say that, rather than adding to a lot of what was said, I would like to associate myself with the remarks that many

of you made on the panel-and thank you for being here—and also a lot of the comments that were made by the previous panel.

I just wanted to focus in on a couple of points. Number one, I agree and want to just expand upon what was said earlier. We need not try to mix foreign policy and defense policy with trade policy and my sense is that there are some people in this administration who have been trying to do that and I think that they may have influenced the President wrongly on some of these issues.

We have seen, throughout the last several decades, a tremendous downturn in the number of people who are employed in core industries in our Nation-in southwestern Pennsylvania, in the Midwest, in the Great Lakes, and across America. The steel industry has been bashed, steelworkers have been laid off by the tens of thousands, and communities have fallen apart. I watched it in Pittsburgh, which, at one time, was known as the "Steel City." It's not the "Steel City" anymore and when those workers are laid off in those numbers and you go into a town like Aliquippa, Pennsylvania and 13,000 workers are laid off in 1 day and the steel mill is leveled, the town is leveled. Families are torn apart. Violence occurs both in the community and among family members. People commit suicide.

What we are talking about here is a diminishment of a core industry and a prolonged period of time where this is just getting a lot worse. And, what we have heard is, well, we will make more trade adjustment assistance available. What does that do? The horse has been stolen. What are we going to train him to do?

We have heard, well, we are going to give the steel industry more tax writeoffs. They don't need tax writeoffs. They need us to enforce the trade laws.

I would say, gentlemen—and I know that, from your statements, most of you agree the people that we are talking about, the 10,000 that have been laid off, occur at a time when we have not recovered from those tens of thousands that were laid off in the seventies and eighties. Those communities haven't recovered yet. These are people that work very hard. It used to take 10 manhours to produce a ton of steel, now it takes 2 man-hours. That is how much better they have gotten just since 1970. They work hard, they play by the rules, and now the Federal Government fails to enforce those rules. What kind of a message do we send to those workers that are out there in the workplace?

We have had a record trade deficit of $168.6 billion last year. Steel is the tip of the iceberg. As it has been said, we have gone bananas over bananas, we have got a beef with beef but when are we going to stand up for steel, a core industry? If this country finds itself in a defense dilemma, we will need steel. We can put blueberries on our cereal. The heck with bananas. We can live without them.

I agree. We have to have the Visclosky bill. I am a cosponsor of the Regula bill. I think that Mr. Traficant is right, we need a 3month moratorium, just to have time to figure out where it is that we are and where we need to be. We have watched the textile industry go away, the shoe industry go away, so many of our industries we have chased away. Don't make the steel industry the next industry.