THE WHITE HOUSE
Office of the Press Secretary
STEEL ACTION PROGRAM
The Administration will, first and foremost, continue to vigorously enforce our trade laws to ensure that our trading partners play by the rules. Unfair trade has been a significant factor in the import surge, and recent decisions in trade cases show that unfair trade remains a problem. We will continue a policy of zero tolerance of unfair trade. We will continue to press those most responsible for the surge to trade fairly and return imports to pre-crisis levels.
We will take the following administrative actions to identify and address factors that pose continuing risks for the health and vitality of the U.S. steel industry, U.S. steel workers, and the U.S. economy. This includes problems relating to unfair trade and economically unjustifiable global capacity. While not part of this action program, we have agreed to establish an informal group to meet to discuss legislative proposals as needed and appropriate.
ELIMINATING UNFAIR PRACTICES THAT SUPPORT EXCESS CAPACITY
We will expand our efforts to address a broad range of unfair practices that support economically unjustifiable capacity. a. Japan: Trade Fairly and Return to Pre-Crisis Levels Japan was the single largest contributor to last year's steel surge. The Administration will continue to make clear to the Government of Japan that Japan must trade fairly and return exports to pre-crisis levels. To strengthen our efforts to address unfair trade practices in the steel sector, we will pursue regular, bilateral discussions with Japan to review steel issues and promote fair, market-based trade. The Japanese Government has made corporate restructuring a key priority, as evidenced by its June 11 industrial restructuring and employment package. We support far-reaching market oriented restructuring of and market-based competition in Japan's economy. We will, among other things, endeavor to ensure such plans do not involve unfair or trade distorting subsidies, government programs or government policies that would support excess production capacity. b. Republic of Korea: Eliminate Unfair Practices that Support Excess Capacity Building on progress already made in bilateral discussions with the Republic of Korea, the Administration will encourage and pursue effective and credible operational restructuring in the context of Korea's broad program of corporate and financial restructuring, as well as the elimination of unfair or trade distorting practices and subsidies that support economically unjustifiable capacity. c. Engage Other Steel Exporting Nations The Administration will launch bilateral discussions with countries that have contributed significantly to the steel import surge to ensure fair trade, market-based production, and compliance with international trading rules. Information developed through Administration import and subsidy monitoring programs, and received from U.S. producers and workers, will be used to develop strategies to address specific issues and concerns. d. NIS Countries: Rationalizing Production and Trade Practices Russia and Ukraine account for a substantial share of global steel capacity. The Administration will explore bilateral and multilateral targeted assistance to Russia and Ukraine aimed at facilitating restructuring in their steel sectors that would help to address economically unjustifiable steel capacity. Objectives would include: 1) advancing market-based reforms that will help to rationalize capacity; 2) environmental clean-up; 3) labor retraining; and 4) promoting domestic demand and sound business and trade practices. The Administration will promote these goals in a number of fora, including at the OECD Steel Committee meeting this November. Under special circumstances, agreements governing the level of imports from particular nations may be appropriate. The U.S. steel industry and workers have expressed concern about steel imports from Russia and other NIS steel exporting countries, and the steel unions have raised the possibility of negotiations with these countries to address steel import surges. On July 12, Commerce concluded a comprehensive steel agreement with Russia establishing quotas on a range of steel products that account for more than 90% of imports of Russian steel. The agreements negotiated with Russia will reduce its exports to the U.S. of hot rolled steel by 80% and its cold rolled exports by 50%. Vice President Gore played a critical role in securing this agreement through two calls in the final hours of negotiations to Prime Minister Stepashin. These agreements will reverse the surge from Russia, and prevent surges in other products from Russia in the future. We will consult with the U.S. steel industry, steelworkers, Congress, other domestic interests and FSU governments about whether agreements with FSU nations other than Russia might be appropriate.
2. USG Commitment to Oppose International Financial Institution
Lending that Increases Subsidized Steel Production
To help address the problem of foreign subsidies, the Administration will work within international financial institutions (IFIs) to eliminate existing government subsidies to favored industries, and will oppose any lending by the Multilateral Development Banks to increase subsidized steel production overseas. Moreover, the Administration will press for transparent IFI reviews of public spending by foreign governments to uncover potential subsidies. Finally, the Administration will work with IFIs to encourage the privatization and restructuring of government-owned steel enterprises along market principles, particularly in Eastern Europe and the former Soviet Union, in order to get these governments out of the steel business.
3. Examination of Subsidies and Market Distorting Trade Barriers for
Steel and Steel Inputs
Commerce's Subsidy Enforcement Office within the International Trade Administration will conduct an intensive examination and analysis of current subsidies given to producers of steel and inputs for finished steel products (iron ore, coke, semi-finished steel products). The International Trade Administration will also examine the extent to which government actions have led to other market-distorting trade barriers. The International Trade Administration will prepare a report outlining the results of its examination and, with USTR and other agencies, provide recommendations on the most effective means to address these subsidies and market-distorting trade barriers, including through the application of countervailing duty or other trade laws.
4. Assess Potential Unfair Pricing Practices on Steel, Iron Ore and
Commerce will meet with producer and labor groups within the steel, iron ore and coke industries to examine current import pricing practices; potential subsidization of imports; and the impact of imports on the domestic industry. Based upon an assessment of the evidence examined during the review, Commerce will consider potential actions under U.S. trade laws.
5. Enhanced Import Monitoring and Assessment
The Administration will expand and strengthen the current steel import monitoring programs within Commerce, USTR and Customs and will work with Congress to provide the necessary funds. Commerce will expand its current import monitoring activity by increasing the products covered to include all steel products, as well as significant steel inputs such as iron ore and coke. Country coverage will be expanded to cover all steel exporters and will include specialized monitoring programs for circumvention and diversion. On a regular basis, Commerce will provide government/industry advisory groups with information regarding potential import surges or rapid price declines that may indicate unfair trading activity. USTR will use the information developed in consultation with U.S. industries and workers and other U.S. agencies, to assess the impact of import surges and foreign practices and to develop and implement appropriate responses. Customs will make monitoring of compliance with antidumping orders a priority of its existing comprehensive compliance assessment program, which is implemented by intensive compliance audits. b. Spotting Circumvention of Dumping Orders Commerce, Treasury and the ITC will work together to establish a statistical marker to the current tariff schedule that will easily identify products subject to trade actions including antidumping and countervailing duty orders and section 201 relief. This will help identify and prevent circumvention of antidumping orders. Customs will create a new national Customs center for monitoring steel imports; researching patterns of steel trade, including pricing and shipping; and disseminating information to appropriate government agencies for regulatory or enforcement purposes. The Administration will work with the Congress to secure appropriate funding. The Center will draw on Customs resources in all ports and disciplines to provide a national approach to addressing significant steel trade compliance issues. c. Early Trade Data Release The Administration has announced criteria for requesting early release of preliminary import data and will continue the early release of steel data.
STRONG TRADE LAWS
6. Maintain Strong, WTO-Consistent U.S. Trade Laws Within
The Administration has made swift and effective enforcement of the U.S. unfair trade laws a key component of its response to the steel import surge. We will continue to work in the WTO and other fora to maintain strong and effective U.S. antidumping and countervailing duty remedies. 7. DOC to Promulgate Regulations on Critical Circumstances to Enhance AD/CVD Enforcement In recent investigations of hot-rolled steel and cut-to-length steel plate, Commerce applied a new policy that permits it to issue early in an investigation a preliminary critical circumstances determination. Such a determination places importers on notice that they may be subject to dumping duties on entries made as far back as the date the investigation was initiated. It tells importers they cannot evade duties just by speeding up imports. In the hot-rolled and steel plate cases, the preliminary critical circumstances findings have played a significant role in preventing further surges of steel imports. Commerce will codify this policy by promulgating a regulation.
8. Negotiate Tough Subsidies Disciplines during WTO Accessions
As part of WTO accession negotiations, the Administration will seek strong adherence by acceding governments to WTO subsidies disciplines, including the elimination of export subsidies and import substitution subsidies that are normally prohibited under WTO rules. As appropriate to the country concerned, the Administration will also seek effective remedies in the WTO against the trade-distorting practices of state-owned enterprises.
9. Enhance U.S. and Foreign Commercial Service Program to Promote
Exports of American Steel
Commerce, through the U.S. and Foreign Commercial Service of the International Trade Administration, will ensure that exports of domestic steel and steel products are strongly promoted. This export promotion program will provide marketing and training support in export markets for new and expanded steel market segments, including steel framing, roofing and other applications in commercial and residential construction, in a WTO-consistent manner. 10. Conference on the Impact of Unfair Trade Practices on the U.S. Steel Industry and its Upstream Suppliers The Administration will convene a conference to examine the cumulative impact of unfair trade on the steel industry and its upstream suppliers and workers. The conference will include government officials and industry and union representatives of the steel, iron ore, coke and semi-finished steel industries. The conference will discuss ways to restore the long-term viability of upstream suppliers while maintaining the competitiveness of the U.S. steel industry. It will also focus on unfair practices that support economically unjustifiable global capacity in these industries in preparation for a high-level international conference on overcapacity in the steel industry.
11. Global High Level Conference on Excess Capacity in the Steel
The Administration will propose a high level conference on unfair practices that support economically unjustifiable steel capacity in the OECD or another appropriate forum. This conference would examine current steel capacity and subsidies, and develop strategies for addressing capacity problems where capacity is no longer viable or sound from a market or environmental standpoint. The conference would also examine labor adjustment and employment issues. USG proposals for consideration at the conference could flow from the earlier steel conference between the USG, industry and unions. We would envision that participants in this conference would include not only government officials but representatives from each country's steel industry and unions. The President will advance the concerns we raise here directly with leaders of individual steel producing nations. 12. Steel Worker Training The Administration will explore federal funding as appropriate for steel worker training, including but not limited to funding for the Institute for Career Development, a work force training program for eligible members of the Steelworkers union. The Institute's emphasis is on teaching portable skills steelworkers can use to enhance their existing careers or take them beyond the steel mills. # # #