HAGEL URGES ITC TO RECOMMEND STEEL REMEDY
THAT WILL NOT ADVERSELY IMPACT THE GLOBAL ECONOMY

Washington, DC - Senator Chuck Hagel (R-NE) called on the International Trade Commission (ITC) to find a remedy to address the problems of integrated domestic steel producers without threatening the global economy and America's downstream steel users. Hagel urged the Commission to recommend to the President "a remedy that addresses the industry's problems without adversely impacting the global economy that is so essential to the health of our own economy."

Senator Hagel, in a statement supporting the interests and concerns of consumers and industries that rely on open markets to stay competitive, said trade barriers "never have and never will" solve the problems facing the domestic industry.

"Trade barriers do not address competitiveness problems. Barriers do not create incentives to restructure, consolidate, reform, and innovate," said Hagel. But barriers will "increase the likelihood of a prolonged economic recession through inflationary prices," and threaten the progress the U.S. has made in the course of 50 years of trade liberalization through the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO).

Speaking on behalf of the more than 74,000 Nebraskans employed in steel-using industries, Hagel identified other negative economic consequences of trade barriers. "Import barriers also hurt downstream industries by creating higher prices and supply problems…They also mean the elimination of some goods to consumers and job losses to workers in downstream industries. More than 50 times as many workers are employed in steel-consuming industries as in the steel industry itself."

Consuming Industries Trade Action Coalition (CITAC) Counsel Lewis Leibowitz and CITAC-member company Autocam also provided testimony in Friday's hearing.

Leibowitz gave four reasons the proposals for tariffs, quotas and floor prices as remedies are doomed to fail: 1) the plan proposed by U.S. integrated producers will do more harm than good; 2) four years of restrictions, as requested by domestic producers, will likely lead to demands of compensation from U.S. trading partners; 3) integrated producers, as they have in the past, will not stop with four years of restrictions, but attempt to extend the restrictions further; and 4) maximum tariffs are certain to be challenged in the WTO and likely to be found inconsistent with America's international obligations.

John C. Kennedy, President and CEO of Autocam Corporation of Grand Rapids, Michigan in his testimony on Friday provided more detail on the downstream impact of the proposed trade barriers. Responding directly to import restriction proposals from domestic integrated producers, Kennedy explained that the tariffs, quotas and floor prices proposed by integrated producers would devastate his company's U.S. operations and voiced concern that a 50-percent tariff on the steel product Autocam uses could eliminate those imports from the U.S. altogether. In addition, steel-using manufacturers would lose an estimated 30,000 jobs as a result of the tariff remedy.

CITAC members providing testimony on November 6 and 8 included: Chairman Jon Jenson; Mark J. Erickson, President of Thomas Engineering Company and Chairman of the Precision Metalforming Association; William E. Sopko, CEO of Stamco Industries; James Zawacki, President of GR Spring & Stamping; Al Suter, Senior Advisor and Retired Vice Chairman and COO of Emerson; Dennis Rochford, President of the Maritime Exchange of the Delaware River and Bay; and James O'Donnell Chief Financial Officer of Camcraft.

In his concluding remarks to the Commission on Friday, Hagel stated that possible remedies for effectively addressing the problems of integrated producers include government assistance. "For example, in place of import quotas, the Administration recently agreed to provide grants to the wheat gluten industry…to help it become more competitive."

According to Leibowitz, "CITAC supports creative approaches to the problem, such as remedies that don't create price or availability problems for downstream users of steel. As Senator Hagel said, we need remedies that get to the root of what ails the domestic steel producers."