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Office of the Press Secretary

For Immediate Release August 5, 1999


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.


  1. Bilateral Initiatives to Address Unfair Practices Supporting 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 

     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 


5. Enhanced Import Monitoring and Assessment

  1. Close Monitoring of Trade Trends
          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 

          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.


6. Maintain Strong, WTO-Consistent U.S. Trade Laws Within

Multilateral Fora

          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


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.

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