The Department of Commerce will release a plan shortly to aid the US steel industry.
According to Robert LaRussa, the Acting Undersecretary of Commerce for International
Trade, the plan will focus on ways the US can counter unfair trading practices by other
countries. The new program will focus on foreign nations that unfairly subsidize their
domestic producers through direct subsidies or indirectly through business practices that
shut outsiders out of their domestic markets. China and Japan in particular will be carefully
reviewed.
Problems within the Russian steel industry also are being probed. A team of 17
Commerce Department trade specialists is exploring the use of barter in Russia, the
nonpayment of taxes, and the nonpayment of wages and how this impacts steel trade.
One aspect of the program will involve technical assistance for steelmakers, including
teaching Russian steel executives everything from cost accounting to how dumping laws
work.
In fact, the US and Russia have already formally launched a new joint steel dialogue
aimed at eliminating practices leading to unfair trade. The memorandum of understanding
includes the following areas of concern: the globalization of the steel industry; structural
and market-based factors causing steel trade disputes; and technical assistance programs
to develop Russia's domestic steel market. Talks are expected in the form of
government-to-government exchanges, joint government-industry discussions, and direct
industry-to-industry and union-to-union contacts. The first meeting is scheduled for July.
On the steel users' side, foreign companies, consumer groups and ardent free traders have
released a report on how federal assistance to US steel producers has hurt American
consumers. The American Institute for International Steel's (AIIS) study details up to
$151 billion in US consumer costs over the past 40 years from aid to the steel industry.
The study, written by two lawyers who represent Japanese steel producers, describes
what AIIS calls "protectionist and corporate welfare-style policies."
The study blames the steel industry's problems over the last 40 years on decisions made
by US companies not to invest in new technologies that would have made them more
efficient. Instead, when they began losing market share to imports in the 1960's, US
producers sought government assistance.
For a copy of the 300-page report, "Paying the Price for Big Steel," go to
http://www.aiis.org.
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