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
Coke
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.
EARLY WARNING
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
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
enterprises.
OTHER MEASURES
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
Industry
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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