My belief in free trade is rock solid but it is predicated on fairness. Given a level playingfield, our industry can compete with any in the world. But, I would challenge anyone to look at these export figures and tell me with a straight face that our antidumping laws have not been egregiously violated. Illegal actions deserve stern punishment. It is my hope that this Subcommittee will look favorably on the various bills that have been introduced to address this crisis and act quickly to bring them to a vote. Only the most aggressive action by the United States will ensure that our trading partners do not continue their illegal actions which are harming our citizens and our communities. The time has long since passed to evaluate and commiserate. The time now is for action-strong and decisive action. That is what the constituents deserve. This is what I will work to achieve. And, again, I thank you, Mr. Chairman, for this opportunity. [The prepared statement follows:] Statement of Hon. Marion Berry, a Representative in Congress from the State of Arkansas Thank you, Mr. Chairman and Mr. Levin (Ranking Dem). I appreciate the chance to speak today, although I am not here to give you a good report about what's happening in the my District. Unfortunately, I am here to share with you the pain of a small community in the Blytheville area of Arkansas. I don't represent one of the traditional steel districts that you hear about. Actually I represent a part of the country where farming is much more common. I grew up on a farm, and so did a lot of the men and women who now work in steel factories. Before the steel industry came to the Blytheville area, there was a U.S. Air Force base located there. It was closed in the early 90's. If any of you have lived through the closing of a military base, you know how devastating it can be to a local economy and the community. These are hard working folks who had the rug yanked out by the federal government less than a decade ago. Jobs were lost and money just disappeared from the community. I'm proud to say that this town has rebounded in a remarkable way. The Nucor steel company came in and built a mini-mill steel plant that created hundreds of high paying jobs for the whole region. Since then, another Nucor plant has been built nearby, and numerous other steel jobs have emerged as a result. These Nucor jobs were averaging $60,000 per year. In the Arkansas Delta, that's a remarkable sum-the median family income for my Congressional District is only about $18,000 per year. That's low, I know, but think about this the per capita income is less than $10,000. That's poverty. The steel industry rescued many, many families from living at a subsistence level. The residents finally were getting properly rewarded for their hard work. These are farm-folks, turned steel workers. They know how to work hard, long hours to get the job done. This happens to be a good fit. The way it works in this company is that the more steel that's produced, the more money the employees take home. Let me tell you: until last year these folks were making an unbelievable amount of steel, and for that part of the country, an unbelievable living for their families. That was before last year. I'd like to run through a couple of figures that really illustrate what this surge of imports has done to one small town in America. As I have said, much of the income of the steel workers in Arkansas is directly related to the amount of steel that is produced. If American steel is not able to compete with dumped foreign steel, obviously there's going to be less steel produced at these factories. The two main steel producers have about 1200 employees, and as I've said they average $60,000 a year. Other steel related industries in the region employee another 1000 people and they average about $30,000 a year. All of these employees have seen their incomes go down by 30% as a result of the unfair trade practices of foreign steel makers-and our government's inaction on their behalf. A quick calculation shows that we have seen $30 million dollars disappear from this community. I consider this $30 million dollars stolen from my constituents by foreign companies. This is not fair, and it's not right. I know that this is not a result of poor performance. These plants in Arkansas are some of the most efficient in the world. People there had every reason to believe that they were putting out the best product at the best price that it could be produced. Under normal economic circumstances, this is a guarantee of success. Normal circumstances don't include illegal action that our government permits to continue. This dumped steel should alarm everyone in Washington. I have lost a lot of faith in our country's commitment to its citizens and that faith can only be restored by taking the strongest possible steps to end this dumping. I have met many times over the last several months with representatives from USTR on this issue and continue to hear the same thing-that they are working on the problem. So far, the Administration's promise to "work on the problem" has done nothing for the people in the Blytheville area who have lost their jobs and continue to suffer because of financial crises overseas. We have seen reports. We know the numbers. We have been promised action. But unfortunately, nothing has been done and steps have not been taken to fix the problem. What the steel workers in my District and all over the country need are solid, immediate plans to end the flow of underpriced steel that is flooding our market, NOT empty promises. We cannot solve the world's financial crises on the backs of our steel workers. Mr. Chairman I know that some of the bills before this committee are rather aggressive in solving this crisis. Some have labeled them protectionist. I want to address that briefly. I have always advocated free trade. I worked hard for the passage of Fast Track. I supported NAFTA and GATT and in my previous position with this Administration, I helped negotiate some of the GATT provisions for agriculture. So I do not come before you recommending this legislation lightly. My belief in free trade is rock solid-but it is predicated on fairness. Given a level playing field, our industries can compete with any in the world. But I would challenge anyone to look at these export figures and tell me with a straight face that our anti-dumping laws have not been egregiously violated. Illegal actions deserve stern punishment. It is my hope that this Committee will look favorably on the various bills that have been introduced to address this crisis and act quickly to bring them to a vote. Only the most aggressive action by the United States will ensure that our trading partners do not continue their illegal actions which are harming our citizens and communities. The time has long since past to evaluate and commiserate. The time now is for action-strong and decisive action. This is what my constituents deserve, and this is what I will work to achieve. Thank you again Mr. Chairman. I yield back and will answer any questions the Committee may have. Chairman CRANE [presiding]. Thank you, Mr. Berry. STATEMENT OF HON. DENNIS J. KUCINICH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Mr. KUCINICH. Thank you, Mr. Chairman, Members of the Subcommittee. We are here because the policy of the administration on international finance and trade is contributing to a crisis for American workers and industries. Much of the rest of the world is experiencing a severe recession, if not depression. Many of these countries have witnessed a dramatic devaluation of their currencies, which makes their products very cheap when sold in the United States. Steel is a case in point. Even if the Department of Commerce and the International Trade Commission had not made preliminary determinations that foreign nations were illegally dumping steel in the United States, foreign steel would still underprice American steel because of the devalued currencies of those nations. This is why section 201 and 301 trade cases are important but not adequate. Cheap, foreign steel will continue to underprice and take away market share from American steel companies and American steelworkers. As this process continues, it is reflected statistically in a growing trade deficit. The administration's policy re sponse to the global economic crisis has been to encourage foreign producers to keep manufacturing for sale in the United States. In other words, the centerpiece of the administration's policy is to widen the U.S. trade deficit. This is contributing to layoffs in many U.S. industries and it has reached a crisis level in steel. There is no question that the U.S. trade deficit is growing at a rapid pace. The goods and services trade deficit grew nearly 54 percent last year over the preceding year, according to figures compiled by the Economic Policy Institute, and reached a level of $169 billion, according to the U.S. Department of Commerce. Cheap, foreign steel is flooding the American market. Last year, a record amount of foreign steel came to the United States. In the third quarter, 54 percent of foreign steel was brought to the United States. More steel was brought than in the third quarter of the preceding year. At the same time, American workers in industries affected by foreign imports are losing their jobs. We are here today because the steelworkers have been dramatically affected by the import of foreign steel made cheap by currency devaluation. An estimated 10,000 American steelworkers have already lost their jobs. Steelworkers are not losing their jobs because the American steel industry is inefficient. In fact, American steel is the world's most efficient. The reason American steelworkers are losing their jobs is that the price of foreign steel is so much cheaper-due to the devaluation of the currencies of those countries. Steelworkers are not the only workers losing their jobs to cheap imports. According to the Economic Policy Institute, 285,000 American workers lost their manufacturing jobs between March 1998 and January 1999. The inflow of foreign products made cheap by currency devaluation is having and will continue to have a profound, negative effect on the U.S. economy. The Financial Times wrote in an editorial on February 1 that the U.S. trade deficit is "unsustainable"-unsustainable because record levels of consumer debt combined with mounting American job loss and resulting loss of wages and benefits will make it impossible for Americans to continue to spend record amounts on foreign products. Nothing the administration has done to date recognizes that only comprehensive action to stem the inflow of foreign steel made cheap by currency devaluation will, in effect, work to resolve this. On the contrary, members of the administration have counseled that America "stay the course" and continue importing cheap foreign imports at record levels. When the administration announced an agreement with Russia on Monday, February 22-which shows that the administration can do something when it wants to-I am concerned that is the limit of what the administration response will be to directly curb the inflow of cheap foreign steel. Left at that, this response will be inadequate. Similar agreements are needed with Brazil and Japan and I am concerned the administration will be deterred from taking effective action because of the World Trade Organization. Of course, an agreement with Russia is not subject to the WTO because Russia is considered a “nonmarket economy." Brazil and Japan are full members of the WTO. I want to address the objection that our remedy for the steel crisis conflicts with the World Trade Organization. I do not believe that the WTO is a legitimate reason for the administration or this Congress to fail to limit steel imports. When Congress passed the WTŎ Implementation Act in 1994 and gave the administration negotiating authority for the WTO in 1988 and again in 1994, Congress did not do so knowing that the cost would be the American steel industry. I defy anyone to show me that any congressional committee discussed and accepted the demise of the steel industry as an acceptable and foreseeable cost of passing fast track and the WTO. It simply did not happen because Congress did not anticipate that the WTO would prohibit appropriate, quota-based limits on imported steel made cheap by currency devaluation. If you feel the WTO does not permit America to take effective steps to preserve the steel industry from the import surges caused by currency devaluation, then it is a clear signal that the Uruguay round Agreement was inadequate. Why should that stop us? Congress has always and routinely refined and amended laws based on experience. In conclusion, we should treat the question of the WTO no differently. This Subcommittee hopefully will report and Congress should pass the Visclosky-Quinn-Kucinich-Ney steel import bill. If the WTO is deemed the problem, Congress should choose to preserve the steel industry and change the WTO Agreement just as it would any other inadequate, defective law. Thank you, Mr. Chairman. [The prepared statement follows:] Statement of Hon. Dennis J. Kucinich, a Representative in Congress from the State of Ohio We are here because the policy of this Administration on international finance and trade is contributing to a crisis for American workers and industries. Most of the rest of the world is experience a severe recession, if not depression. Many of these countries have witnessed a dramatic devaluation of their currencies, which makes their products very cheap when sold in the United States. Steel is a case in point. Even if the Department of Commerce and the International Trade Commission had not made preliminary determinations that foreign nations were illegally dumping steel in the U.S., foreign steel would still underprice American steel because of the devalued currencies of those nations. This is why Section 201 and 301 trade cases are important but not adequate. Cheap foreign steel will continue to underprice and take away market share from American steel companies and American steel workers. As this process continues, it is reflected statistically in a growing trade deficit. The Administration's policy response to the global economic crisis has been to encourage foreign producers to keep manufacturing for sale in the U.S. In other words, the centerpiece of the Administration's policy is to widen the U.S. trade deficit. That is contributing to lay-offs in many American industries, and it has reached a crisis level in steel. There is no question that U.S. trade deficit is growing at a rapid pace. The goods and services trade deficit grew nearly 54 percent last year over the preceding year, according to figures compiled by the Economic Policy Institute, and reached a level of $169 billion, according to the U.S. Department of Commerce. Cheap foreign steel is flooding the American market. Last year, a record amount of foreign steel came to the U.S. In the third quarter, 56 percent more foreign steel was brought to the U.S. than in the third quarter of the preceding year. At the same time, American workers in industries affected by the foreign imports are losing their jobs. We are here today because the steel workers have been dramatically affected by the import of foreign steel made cheap by currency devaluations. An estimated ten thousand American steel workers have already lost their jobs. Steel workers are not losing their jobs because the American steel industry is inefficient. In fact, the American steel industry is the world's most efficient. The reason American steel workers are losing their jobs is that the price of foreign steel, though more inefficient, is so much cheaper due to the devaluation of the currencies of those countries. Steel_workers are not the only workers losing their jobs to cheap imports. According to Economic Policy Institute, 285,000 American workers lost their manufacturing jobs between March 1998 and January 1999. The inflow of foreign products made cheap by currency devaluation is having and will continue to have a profound, negative effect on the U.S. economy. The Financial Times wrote in an editorial on February 1 that the U.S. trade deficit is "unsustainable." Unsustainable because the record levels of consumer debt, combined with mounting American job loss, and resulting loss of wages and benefits, will make it impossible for Americans to continue to spend record amounts on foreign products. Nothing the Administration has done to date recognizes that only comprehensive action to stem the inflow of foreign steel made cheap by currency devaluation is necessary. On the contrary, in recent statements to Congressional committees, members of the Administration have counseled that America "stay the course" and continue importing cheap foreign imports at record levels. While the Administration announced an agreement with Russia on Monday, February 22, which shows what the Administration can do when it wants to, I am concerned that it is the limit of what the Administration will do to directly curb the inflow of cheap foreign steel. Left at that, the Administration response will be completely inadequate. Similar agreements are needed with Brazil and Japan, and I fear that the Administration will be deterred from taking effective action because of the World Trade Organization. Of course, an agreement with Russia is not subject to the WTO, because Russia is considered a "non-market economy." Brazil and Japan are full members of the WTO. The Administration's policy response to the worldwide economic recession is unsustainable. The U.S. cannot continue as an "oasis of prosperity" while the rest of the world experiences economic depression of a magnitude in some countries that greatly overshadows our own Great Depression of the 1930's. The extent of the economic crisis around the worked is so great that even if the U.S. doubles its record trade deficit, it will not be enough to pull the rest of the world out of its troubles. But it will be enough to send thousands more Americans out of work and send the U.S. into a recession of our own. I want to address the objection that our remedy for the steel crisis conflicts with the World Trade Organization. I do not believe that the WTO is a legitimate reason for the Administration or this Congress to fail to limit steel imports. When Congress passed the WTO implementation act in 1994 and gave the Administration negotiating authority for the WTO in 1988 and again in 1994, Congress did not do so knowing that the cost would be the American steel industry. I defy anyone to show me that any Congressional committee discussed and accepted the demise of the steel industry as an acceptable and foreseeable cost of passing Fast Track and the WTO. It simply did not happen, because Congress did not anticipate that the WTO would prohibit appropriate, quota-based limits on imported steel made cheap by currency devaluation. If you feel that the WTO does not permit America to take effective steps outlined in the Visclosky-Quinn-Kucinich-Ney bill to preserve the steel industry from the import surges caused by currency devaluation, then it is a clear signal that the Uruguay Round Agreement was inadequate. Why should that stop us? Čongress always and routinely refines and amends laws based on experience. We should treat the question of the WTO no differently. This Committee should report and Congress should pass the Visclosky-Quinn-Kucinich-Ney steel import bill. If the WTO is deemed a problem, Congress should choose to preserve the steel industry and change the WTO agreement, just as it would any other inadequate, defective law. Chairman CRANE. Thank you. And now we shall commence questions. Ralph, could you take a seat at the end of that dias for a question from me, please? Ralph, H.R. 412 deletes the word "substantial" from section 201 but does not include WTO replacement language, which requires that increased imports cannot be the cause of injury when factors other than increased imports are causing injury at the same time. To me, it seems that, although the WTO does not use the word "substantial," it still imposes requirements that mean the same |