US steel welcomes the dawn of a new era of protection
A Trade Promotion Authority-related renewal of trade adjustment assistance to help workers displaced by imports included new language for pursuing antidumping and countervailing duty investigations. It lowered the material injury standard for winning dumping and subsidy cases — a long-sought US mill goal.
Mills argued that they shouldn’t have to go broke before they get relief from unfairly traded imports. A couple decades ago it was a rule of thumb that domestic producers suffer at least two consecutive money-losing quarters to have a reasonable shot at winning government relief from imports.
That standard loosened over the years, but mills were still leery about filing unfair trade cases while they were making money. Lawyers are expensive and mills wanted to be reasonably sure they had a good chance of winning their cases at the International Trade Commission’s final injury determination.
And just as two decades ago legalized gay marriage was unthinkable, so too was the idea that steelmakers — by far the largest users of government dumping and subsidy protections — could win ITC injury determinations without suffering red ink.
Now, thanks to the new trade language approved by legislators last week and signed into law by President Obama this week, losing money is not required to get dumping and subsidy duties in place.
New legislation says the ITC “shall not determine that there is no material injury or threat of material injury to an industry in the United States merely because that industry is profitable or because the performance of that industry has recently improved.”US Steel CEO Mario Longhi touted the change as “an important first step” to leveling the playing field against unfairly traded imports.
“We look forward to working with members of the [Obama] administration to ensure that US trade laws and practices are strong and that countries who break our laws are punished before irreparable harm is done,” he said.
In more contentious times, groups like the American Institute for International Steel (AIIS) and the Consuming Industries Trade Action Coalition (CITAC) — steel importers and users of imported steel, respectively — would be up in arms over the law change.
CITAC, established in 1998 and now inactive, described itself back then as “the first organized, entirely US-based, private-sector opponents of the US domestic steel industry telling the story of the devastating downstream effects that would result from new steel import restrictions. We designed a comprehensive public affairs program to fight the domestic steel industry ‘mythology’ with convincing economic data.”
American steel trader and AIIS chairman John Foster last week commented on the new material injury language with no such disparagement, promising that steel traders “will follow the laws as they are and all we ask is that they be applied fairly, fully transparent and responsibly.”
He said the AIIS is concerned that other countries might adopt similar policies.
“History has shown that other countries are not maybe as judicious and responsible at applying such laws as we are here in United States,” he said.
This is a far cry from the almost militant past opposition to massive domestic steel unfair trade cases in a US market that has been roughly 25%-30% supplied by imports.
The times are, indeed, a-changin’.
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