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STEEL INDUSTRY EXPRESSES DEEP APPREHENSION ABOUT GATT NEGOTIATIONS

STEEL INDUSTRY EXPRESSES DEEP APPREHENSION ABOUT GATT NEGOTIATIONS
 WASHINGTON, Dec. 16 /PRNewswire/ -- The following is the full text of a statement of steel trade policy released today by the American Iron and Steel Institute:
 A critical point apparently has been reached in the GATT Uruguay Round of multilateral trade negotiations. It is reported that a complete "package" of agreements will be finalized at the end of this week, including revisions to the GATT Antidumping and Subsidies Codes and related Dispute Settlement rules. These codes are of paramount importance to the domestic steel industry since they are the basis for U.S. unfair trade statutes that provide redress against injuriously dumped and subsidized steel and steel-containing imports.
 Major concessions by U.S. negotiators in concluding the revised GATT Antidumping and Subsidies Codes would have far reaching consequences for domestic steel producers. Over the past two years, the U.S. government has repeatedly asserted that our unfair trade laws will not be weakened by the Uruguay Round. This is essential since U.S. trade laws may be steel's only recourse for dealing with injuriously dumped and subsidized imports after the scheduled expiration of VRAs next March 31. Any weakening of the trade laws would be grossly unreasonable given the trade problems of the steel industry that have existed over the past 30 years.
 Accordingly, AISI's domestic membership, which accounts for some 80 percent of our nation's steel production, urgently calls on the administration to reject all such weakening proposals and to follow the guidance of the House GATT Caucus leaders in their letter to the President of Oct. 21, 1991.
 Compounding the gravity of the current situation, Code revisions that result in substantial weakening of our unfair trade laws would greatly prejudice the negotiation of a comprehensive, effective and enforceable "trade laws plus" Multilateral Steel Agreement (MSA), which domestic steel has long supported.
 To dismantle this nation's basic defenses against unfair trade -- at a time when our economy is in serious disarray -- would be irresponsible and dangerous. Therefore, domestic steel will closely examine the texts concluded in Geneva and will work with the administration, the Congress and other U.S. industries to ensure that weakening amendments to the relevant GATT Codes are firmly rejected.
 Meanwhile, AISI is continuing its ongoing review of steel trade policy issues, including the scheduled expiration of VRAs, and member companies have advised that they are continuing their work on possible unfair trade cases for filing at the appropriate time.
 Following is the full text of the letter sent Oct. 21, 1991, to President George Bush:
 Once again the Uruguay Round is entering a critical stage in the negotiation of a new GATT trade agreement. Unfortunately, we have been informed that a number of provisions remain on the table that, if enacted into the agreement, will substantially erode the effectiveness of our antidumping and countervailing duty (AD/CVD) trade laws. In clear and unmistakable terms, we will unequivocally oppose any proposal that will effectuate the weakening of multilateral and U.S. trade laws against market-distorting dumping and subsidy practices.
 In our judgment, U.S. negotiators must seek to mediate agreements in the GATT that fully preserves our ability to take effective and timely AD/CVD duty actions. Therefore, we would like to reiterate the following concerns.
 Antidumping Code
 -- Department of Commerce methods of calculating cost of production and dumping margins must be preserved.
 -- The current standards for determining material injury in antidumping cases shall not be weakened.
 -- Diversionary tactics which attempt to frustrate the remedial effect of the law through circumvention should continue to be covered by the original outstanding order as set forth in the existing U.S. GATT proposal.
 -- Repeat dumping by individual firms must be remedied under certain circumstances through escalated penalties and the imposition of duties from the point of initiation of the antidumping investigation. In addition, remedies against dumping in third country markets should be available.
 -- Proposals to automatically terminate/sunset antidumping duty orders after a specified period of time should continue to be flatly rejected by U.S. negotiators. In short, if dumping or subsidization are still occurring then applicable duties should continue to be assessed.
 -- We do not want to see the requirements for standing and initiation in dumping cases raised. This would make it more difficult and expensive to bring dumping cases.
 -- Higher de minimis standards on the amount of dumping necessary to give rise to a dumping order must not be permitted. Even small amounts of dumping can drive a U.S. company out of business.
 -- Use of averaging of different sales in the U.S. market in dumping cases, which will have the effect of permitting dumped sales to targeted customers and regions, must not be permitted.
 Under current U.S. law and the GATT as currently written, sales in the U.S. market are not averaged together to determine if there is dumping. In other words, if a low price dumped sale is made to one customer, it cannot be offset by a higher non-dumped sale to another customer. Dumping is often targeted at specific customers or regions where foreign competitors seek to make inroads unfairly.
 Subsidy Code
 -- The current standards for determining material injury in CVD cases shall not be weakened.
 -- The current right of the United States to offset fully an injurious subsidy should not be compromised by the imposition of new arbitrary standards which prevent the Department of Commerce from valuating subsidies according to its current methodology.
 -- The existing ability of the United States to offset fully an injurious subsidy must not be compromised by a requirement that a subsidy be measured by reference to the cost to the recipient rather than by references to the actual value of the subsidy.
 -- Proposals to automatically sunset CVD orders after a specific period of time must be flatly rejected by U.S. negotiators. If subsidization is still occurring then applicable duties must continue to be assessed.
 -- Permitting certain subsidy practices (green lighting) must not be agreed to. Money is fungible and if it goes to a company, it can be used to compete unfairly in the U.S. market.
 -- The current GATT draft only lists permissible subsidies and fails to list any prohibited subsidies. Unfair domestic subsidies must be specifically listed.
 -- Any new agreement must not permit developing countries to continue export subsidies without the subsidy being subject to countervailing duties.
 Dispute Settlement Code
 -- The standard of review for dispute settlement in the dumping and subsidies areas must give sufficient difference to the United States administering authorities so that AD/CVD law can be fully applied.
 -- Currently, the GATT Secretariat says that the dumping and countervailing duty laws must be applied very narrowly because they are derogations from other GATT articles ensuring most favored nation and national treatment to traded goods. If this standard is enforced through GATT dispute settlement, then current U.S. AD/CVD laws could be written out of existence.
 The United States -- which prompted the Uruguay Round -- will be under increased pressure to sign off on a final agreement, regardless of its composition. We would stress, however, that a GATT agreement must contribute to the strengthening of U.S. trade laws, not to their demise. It is imperative that our negotiators and trading partners understand that strong and enforceable antidumping, subsidy and dispute settlement codes are critical to our acceptance to any GATT agreement.
 Sincerely,
 John P. Murtha Ralph Regula
 Cong. Steel Caucus Cong. Steel Caucus
 Dick Schulze Ed Jenkins
 Ways and Means Trade Ways and Means Trade
 Subcommittee Subcommittee
 Norm Mineta Don Ritter
 Semiconductor Support Group Semiconductor Support Group
 Cong. High-Tech Caucus
 Nancy Johnson John Spratt
 Cong. Bearings Caucus Cong. Bearings Caucus
 Marilyn Lloyd Frank Horton
 Cong. Textile Caucus Cong. Textile Caucus
 Marcy Kaptur Sander Levin
 Cong. Auto Parts Caucus House GATT Working Group
 Nick Joe Rahall Sid Morrison
 Cong. Coal Caucus Forestry 2000 Task Force
 Lindsey Thomas Ron Wyden
 Forestry 2000 Task Force Forestry 2000 Task Force
 Sonny Callahan
 Forestry 2000 Task Force
 -0- 12/16/91 R
 /CONTACT: James J. Hughes of American Iron and Steel Institute, 202-452-7122/ CO: American Iron and Steel Institute ST: District of Columbia IN: MNG SU:


MK -- DC016 -- 2571 12/16/91 14:06 EST
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