The Canton Repository

June 26,2001

Steel industry probe gains support 

By PAUL M. KRAWZAK
COPLEY NEWS SERVICE

WASHINGTON — A federal investigation into steel imports has the potential to benefit most U.S. steel producers, industry officials who have reviewed an outline of the probe said Monday.

That’s because the investigation will examine the impact of a broad array of steel imports on American steel makers. If those imports are found to be causing serious damage to the domestic industry, President Bush will have the authority to order temporary cuts in imports.

Eighteen American steel makers have filed for bankruptcy protection since 1998, and many of them have blamed surging imports in 1998 and last year.

Including any given imported steel product in the investigation means there is the potential to discover it is causing problems for the domestic industry. That in turn opens the possibility that import limits would be placed on that product, reducing competition for American companies that make a similar product.

Plans for the probe, revealed in a letter from U.S. Trade Representative Robert Zoellick on Friday, are drawing support from both management and labor. Zoellick’s letter lays out the scope of the investigation for
the U.S. International Trade Commission, an independent federal agency, which will conduct the study and report back to Bush.

Leo W. Gerard, president of the U.S. Steelworkers of America, said the investigation is “very broad and all-encompassing” in its coverage of steel products.

Another authority within the industry said the probe will look at the impact of almost all steel imports, with several exceptions. It will not look at steel wire rod and line pipe imports, which already are being limited
after earlier federal investigations into their impact on U.S. business. Noncontroversial imports that failed to draw a protest from American companies also were not included in the investigation.

Despite a lobbying effort from the union, the administration decided against examining the effect of imports of coke, pig iron and iron ore, key components in steel production.

While the union is disappointed with the exclusion of those imports from the probe, Gerard said, “I think there were some compromises the administration made with various groups to try to get a comprehensive filing.”

Duane R. Dunham, chairman of the American Iron and Steel Institute, a steel industry association, said a period during which imports are limited is “a necessary pre-condition for facilitating industry recovery and addressing long-term structural problems, in particular the excess steel capacity offshore and foreign market-distorting practices, which are the root cause of the current crisis.”

Individual steel companies were poring over Zoellick’s letter to see what impact the probe could have on them.

Because nails and other wire products are included, any possible reductions in those imports would help Dallas-based Keystone Consolidated Industries, whose main plant is in Bartonville, Ill.

Robert W. Singer, president and chief executive officer of Keystone, said import curbs would enable the company to sell more nails and wire at higher prices. The firm has lost money the past two years, he said.

Officials at the Timken Co. and Republic Technologies International had not finished their analyses by the end of the day. LTV Corp. did not return phone calls.

The union and the steel institute disagree on one aspect of the investigation — how to treat steel imports from Canada and Mexico. The institute, representing steel companies throughout North America, “will continue to press for the exclusion of NAFTA steel imports from 201 relief,” said Andrew G. Sharkey III, president and chief executive officer of the organization.

The union, which represents workers in Canada and the United States but not Mexico, “will be arguing like crazy that Mexico should be included in the remedy but Canada should not be,” Gerard said.

“Canada and the U.S. are integrated in many ways,” he explained, adding that steel worker salaries are competitive in the two nations. In Mexico, by contrast, steel workers are “being exploited as badly in some
cases as Chinese and Russian steel workers,” he said.

The trade commission typically holds a maximum of two public hearings as part of its investigation, which can take up to four months. But Gerard said he will ask the agency to schedule field hearings in steel-producing areas, possibly including Cleveland and Steubenville; Gary and East Chicago, Ind.; Granite City, Ill.; and West Virginia.

“We don’t want to delay or cause an undue slowdown” in the probe, he said. “But it’s important in determining the magnitude of the injury to also see individuals and communities that are being injured.”