A new dispute has erupted over a decision by the Bush Administration to impose import restrictions on steel. With mid-term congressional elections due in November this year, the American decision imposes a 30% tariff on imported steel for the next three years. The tariff will affect about half of Australia's steel exports to the United States.
The decision takes effect from March 20 and will have an immediate impact on the $450 million steel export market. The decision also places in doubt moves towards an Australian-US free trade agreement. The industrial states in the US are profoundly important in this year's elections, given the narrow majority the Republicans have in the House of Representatives. In the Senate, the Democrats have a one-seat majority.
This is the text of President Bush's announcement of increased protection for the American steel industry.
Free trade is an important engine of economic growth and a cornerstone of my economic agenda. My Administration has successfully launched new global trade talks, reignited the movement for free trade within our own hemisphere, and helped bring China and Taiwan into the World Trade Organization. To open even more markets to American products, I have urged the Senate to grant me the trade promotion authority I need to create jobs and greater opportunities for U.S. workers and farmers.
An integral part of our commitment to free trade is our commitment to enforcing trade laws to make sure that America's industries and workers compete on a level playing field. Free trade should not mean lax enforcement. Consistent with this commitment, last June I launched a three-part initiative designed to restore market forces to world steel markets. This initiative includes international discussion to encourage the reduction of excess global steel capacity and negotiations to eliminate market-distorting subsidies that led to the current glut of capacity. I also called upon the United States International Trade Commission (ITC) to investi-gate the impact of imports on the U.S. steel industry under section 201 of the 1974 Trade Act. The ITC subsequently found that increased steel imports are a substantial cause of serious injury to our domestic industry.
Today I am announcing my decision to impose temporary safeguards to help give America's steel industry and its workers the chance to adapt to the large influx of foreign steel. This relief will help steel workers, communities that depend on steel, and the steel industry adjust without harming our economy.
These safeguards are expressly sanctioned by the rules of the World Trade Organization, which recognizes that sometimes imports can cause such serious harm to domestic industries that temporary restraints are warranted. This is one of those times.
I take this action to give our domestic steel industry an opportunity to adjust to surges in foreign imports, recognizing the harm from 50 years of foreign government intervention in the global steel market, which has resulted in bankruptcies, serious dislocation, and job loss. We also must continue to urge our trading partners to eliminate global inefficient excess capacity and market-distorting practices, such as subsidies.
The U.S. steel industry must use the temporary help today's action provides to restructure and ensure its long-term competitiveness. Restructuring will impact workers and the communities in which they live, and we must help hard-working Americans adapt to changing economic circumstances. I have proposed a major expansion of the National Emergency Grants program to assist workers affected by restructuring with effective job training and assistance. I have also proposed direct assistance with health insurance costs that will be available to workers and retirees who lose their employer-provided coverage. And I support coordinated assistance for communities and a strengthened and expanded trade adjustment assistance program. America's workers are the most highly skilled in the world, and with effective training and adjustment assistance we will help them find better, higher paying jobs to support their families and boost our economy.
This is the full text of a statement released by the Minister for Trade, Mark Vaile:
The decision by the Bush Administration to impose import restrictions on steel will have serious negative impacts on the Australian steel industry, Trade Minister Mark Vaile said today.
“Today’s decision is likely to create short and medium term challenges for the Australian steel industry and will do nothing to encourage global reform in the steel industry,” he said.
“A 30 per cent safeguard tariff is to be imposed for three years on 50 per cent of Australia’s steel exports to the US. Export of Australian slab will be capped at the same volume as supplied in 2001 with no tariff restriction.
“This decision, effective 20 March, will increase the price of Australian steel in the US market, and penalise efficient and competitive Australian producers who have built a $450 million export market to the US on the basis of fair competition.
“The Prime Minister and I, along with the steel industry lobbied hard to persuade the Bush Administration that Australian exports were part of the solution to helping the US steel industry, not part of their perceived problem.
“Most of Australia’s steel exports to the US are quality feedstock supplied to West Coast steel mills, and are an important component of the overall US industry’s needs.”
The Federal Government will now examine all options to restore the Australian steel industry’s full access to the US market.
“I will be consulting with industry as a matter of urgency on the impact this decision will have, and look at the options available, including challenging the decision in the WTO.
“I will also be calling for a steel industry summit to be held in Canberra in the coming days to work with industry to find new market access opportunities for Australian steel.”
This is the text of a statement released by Richard Gephardt, the Democratic Leader of the US House of Representatives:
"The President took a first step today toward restoring the
health of the U.S. steel industry, but much more needs to be done.
Last week the steel companies and the steelworker unions agreed
that 40 percent was the minimum average tariff needed to stabilize
the industry over the short term; today, I am disappointed at the
President's decision to impose average tariffs at less than 30
percent.
"More importantly, the President did nothing to assist the
companies, the steelworkers and their retirees with health care and
pension, or legacy costs. If we want to create a level playing
field for America's steel industry, we must address these costs.
To ensure the long-term health of the steel industry, I urge
President Bush to pledge his support for a legacy cost bill that
can be passed this year.
"The situation remains dire. Although America has the most
productive steel workers in the world, 31 steel companies are in
bankruptcy and 16 have already closed shop. Addressing legacy
costs is vital to the survival of the U.S. steel industry and
crucial to our defense industrial base and national security.
"This is also an issue of jobs and whether the President is
willing to take the necessary steps to maintain the viability and
the vitality of an industry that has produced some of the best jobs
for working men and women in America. I hope the President will
work with Democrats in Congress to make significant progress for
this important industry and its workers."
