The fight to Save Our Steel Jobs came to Capitol Hill on Wednesday, as the Senate Finance Committee held a hearing looking at how enforcing trade rules can level the playing field for U.S. companies and workers.
The message that came out of the hearing room was clear: American companies and workers can compete with anyone in the world — but they need a level playing field in order to do so.
Not surprisingly, the dumping of foreign steel on the U.S. market by South Korea and eight other nations dominated much of the hearing’s discussions. U.S. Steel Corporation President and Chief Executive Officer Mario Longhi and United Steelworkers International President Leo Gerard both testified before the committee about how a flood of Oil Country Tubular Goods (OCTG) products from these countries is negatively impacting the U.S. steel industry and putting jobs at risk.
— Roy Houseman (@royhouseman) June 25, 2014
As Longhi argued in his written testimony:
The approach and manner in which foreign companies are dumping thousands of tons of products into the U.S. market leads business leaders such as me to conclude that American steel companies are being targeted for elimination.
As the CEO, I spend a great deal of my time working to provide good paying, middle-class jobs in America. This requires the constant identification, quantification and planning for every possible variable in order to keep our business operational and competitive. The single most disturbing variable that cannot be quantified or controlled for is foreign companies not playing by the rules.
The History Behind OCTG
About a year ago, U.S. Steel and other OCTG producers filed a trade case with the U.S. Department of Commerce against the nine nations who are dumping steel pipes in the U.S. market. As Longhi testified, these pipes are used in the extraction of oil and natural gas, so they are important to securing our nation’s economic and energy security.
This isn’t the first time that the steel industry has dealt with OCTG dumping, both Longhi and Gerard noted. China tried to do the same thing in 2008, and ultimately lost a trade case. After their loss, Chinese producers quickly abandoned the U.S. OCTG market, “a clear sign that they could not compete when the playing field was leveled,” Longhi adds.
The victory came at a cost, however, as many facilities were idled and thousands of workers lost their jobs. And as Gerard explained in his written testimony, workers today are suffering while the Commerce Department conducts its current investigation:
The USW has been as successful as it can be in its efforts to counter unfair trade, but it’s a losing game. Indeed, the only way we win is by losing. Lost profits, lots jobs, closed factories, hollowed out communities — that is the price the trade laws demand to show sufficient injury to provide relief. In the year or more it takes to bring a trade case and obtain relief, foreign companies can continue to flood the market. By the time that relief may be provided, the industry is often a shadow of its former self, too many workers have lost their jobs and their families and the communities in which they live have a paid a heavy, and often irrevocable, price.
Longhi echoed Gerard's written comments during the hearing, noting that when the steel industry is able to claim victory in one case, almost immediately they find themselves in another lengthy legal battle.
"This is not about one country or one company out there," he told the committee. "This has been going on for more than a decade, so when we are able to succeed against one country, immediately another country comes in and fills the vacuum."
Slowly put surely, the trade cases drain the capacity of the industry. Over the long-term, it simply isn't a winnable fight, Gerard argued.
“When we file those trade cases, we’ll win," Gerard said. "But we’ve already lost.”
The Commerce Department is set to rule on the current case by July 10.
“We can’t afford to send any of these good-paying jobs overseas.”
Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) both noted that they support action to enforce trade agreements. In his opening testimony, Wyden said that “American trade enforcements needs to be brought into the 21st century," adding that poor enforcement of trade agreements costs American jobs.
Hatch echoed those comments, noting that one of the most important trade enforcement tools available is the ability to apply tariffs and anti-dumping duties.
Sen. Bob Casey (D-PA.), who introduced Longhi and Gerard before their testimony, noted that U.S. Steel and the Steelworkers are “two great organizations that work together every day to create jobs.”
If the Commerce Department doesn’t act to address steel dumping, Casey added, the country might lose up to half a million jobs nationwide. “We can’t afford to send any of these good-paying jobs overseas,” Casey said.
It's not just steel jobs that will be impacted by the Commerce Department's decision, Sen. Sherrod Brown (D-OH) noted. If Commerce rules that the dumping of steel can continue, it will set a precedent for other nations and other industries to follow. Gerard agreed:
What the Commerce Department does between now and July 10 in many ways is going to predict the future, not only of the steel industry. I, for one, am terrified of it.
To address the issue in the long-term, more should be done to check that products imported to the U.S. from other countries abide by trade laws before they hit the market, the witnesses noted — and new rules should be put into place so if foreign nations are found to be violating trade agreements, action is taken immediately rather than dragged out over several years.
“The laws of this country can and should be used to help the rest of the world better understand fair play," Longhi said. “When everyone follows the rules, everyone can compete and win. But this must be done under fair law.”