Trade
Protectionist Resolution
Representative James Traficant (D-OH) introduced a protectionist resolution (HRes 442) that would ban for one year the importation of steel from ten countries, an almost certain violation of WTO rules. The resolution is basically identical to one passed by the House of Representatives in 1998 with only 44 dissenting votes, but defeated in the Senate. If passed, the resolution would severely damage the steel-consuming sector, whose 8 million jobs are dependent on access to foreign steel.
According to the American Institute for International Steel (AIIS), "The resurrection of the Traficant Resolution seems to be related to the recent decision by the International Trade Commission that the domestic steel industry was not injured
by imports of cold rolled sheet from six countries."
The resolution calls on Clinton to review and investigate steel imports from Australia, Brazil, China, India, Indonesia, Japan, Russia, South Africa, South Korea and Ukraine, and impose a one-year ban if they are found to have been dumped or violated other US trade laws.
China WTO
President Clinton formally asked Congress to grant China permanent normal trading relations (PNTR) - a move that, if approved, could pave the way for the communist regime to join the World Trade Organization (WTO). The president's legislation also specifies that PNTR becomes effective only when China becomes a WTO member, and only after
a certification that the terms and conditions of China's accession to the WTO are at least equivalent to those agreed to between the US and China in the November agreement.
Senate Finance Chairman William Roth (R-DE) and ranking Democrat Daniel Patrick Moynihan (D-NY) subsequently introduced the president's bill (S 2277). In the House, momentum is growing behind a Sander Levin (D-MI) proposal to grant PNTR, which would also set up a watchdog commission to annually review China's environmental, human rights
and labor policies. The Administration views this proposal as a way of shoring up Democratic support for the agreement by giving lawmakers a forum to air their concerns about human rights and labor abuses.
House Speaker Dennis Hastert (R-IL) has scheduled the vote during the week of May 22, and is predicting it will pass. House Minority Leader Richard Gephardt (D-MO) announced that he would oppose the measure, saying the US must not give up the leverage of its annual review of Beijing's trade status. However, he promised not to rally Democrats as he has in previous trade fights.
A Senate vote has not yet been scheduled, but Majority Leader Trent Lott stated, "If the House decides to consider PNTR before the Memorial Day recess, the Senate would act more likely the first week in June." Sponsors predict the bill will pass there by a wide margin.
Chinese Foreign Ministry spokesman Zhu Bangzao signaled in Beijing that American firms will be hit hard if Congress does not extend unconditional and permanent normal trading privileges to China. The Chinese Foreign Trade Minister, Shi Guangsheng, clarified that if Congress refused to grant his government low-tariff trading rights, "China would deny
US companies access to Chinese markets."
Africa/Caribbean Free Trade Bill
The House and Senate negotiators resolved their biggest dispute recently on the Africa/Caribbean free trade bill, clearing the measure for congressional approval. According to participants, House leaders agreed to a Senate proposal to give Caribbean and Central American nations many of the same duty-free benefits to be extended to sub-Saharan
African nations. And House negotiators, in turn, agreed to some Senate restrictions on apparel imports.
The House-passed bill only dealt with the 48 countries of Sub-Saharan Africa. The Senate bill and now the compromise covers these nations, plus 24 Caribbean and Central American nations as well.
Speaker Hastert said he hoped for a vote as soon as possible after the spring recess. President Clinton has made the bill a top trade priority.
Congressional Trade Office
Senator Max Baucus (D-MT) introduced a bill to establish a Congressional Trade Office (S 226). This office would provide Congress, through the Senate Finance and
House Ways and Means committees, with independent, nonpartisan and
neutral trade expertise. It would also assist Congress in providing more effective and active oversight of trade policy.
Environmental/Regulatory
Ergonomics
The National Academy of Sciences has rejected most of Senator Christopher Bond's (R-MO) criticism of its ergonomics study. Bond, the Chairman of the Senate Small Business Committee, alleged that federal health officials were violating congressional intent in their zeal to set a national ergonomics rule. Rather than evaluating the state of current
knowledge, Bond contended, officials were instead determining what the best ergonomics approach should be. He also complained of closed meetings and not being kept informed.
OSHA recently began nine weeks of hearings during which over 1100 witnesses were scheduled to testify, including the National Association of Manufacturers. Opposition from the business community has barraged the agency with over 7,000 written comments on the rule. Despite all this response, Labor officials are still insisting, "We are on a schedule to have a final rule adopted by the end of this year."
Another obstacle to promulgation of this rule is a recently-introduced resolution sponsored by Representative Henry Bonilla (R-TX) expressing the sense of Congress that OSHA require ample public comment and a sound scientific basis for its proposed ergonomics regulation.
On a related note, the National Association of Manufacturers (NAM) recently announced its estimation that the cost to implement the proposed ergonomics rule is $6.7 billion in the first year, while OSHA estimates the cost at $4.2 billion. The costs would be disproportionately borne by small- and medium-sized businesses.
AWPA Operations Managers will hear a speaker from the NAM at their upcoming meeting who will outline the current ergonomics proposal and the legislative and regulatory process through which the regulation must proceed.
Lead TRI Threshold Proposal
EPA is saying publicly that the lead TRI proposal will not be issued as a final rule until October, at the earliest. If the rule is not finalized by October 31, it will not go into effect in time for the 2001 TRI reporting cycle. It is not known why EPA is signaling this long delay, but it may have to do with the small business issues that AWPA members and others so effectively raised in their comments. The agency has retained Abt Associates, a consulting group, to conduct surveys of small business sectors that would likely be affected by the lowering of the lead reporting threshold. AWPA has participated
in this survey.
Air Quality Standard Improvement Act
Senators George Voinovich (R-OH) and John Breaux (D-LA) introduced a bill (S 2362), entitled the Air Quality Standard Improvement Act, which amends the Clean Air Act. The legislation will require the EPA Administrator to consider risk assessments and cost-benefit analyses as part of the process of establishing a new or revised air quality standard. Overall, EPA would be required to conduct an analysis of incremental costs and benefits of alternative standards, but would have the flexibility to choose a standard where the benefits justify its cost or when health considerations dictate the maximum feasible standard.
The bill was referred to the Committee on Environment and Public Works. The Committee Chairman, Senator Inhofe (R-OK), has agreed to include the bill in a package of bills that will be introduced in the near future to advance discussions on Clean Air Act reauthorization.
During his bill introduction speech, Senator Voinovich stated, "Federal agencies should not force businesses and consumers to throw billions of dollars at a problem without knowing if they're hitting the right target." Senator Breaux added, "The administration failed to adequately consider science, costs and benefits in its proposed changes to the National Ambient Quality Standards (NAAQS) for ozone and particulate matter. The changes to the standards would cost $60 billion to implement, according to the President's Council on Environmental Quality."
PM 2.5/Federally Permitted Releases
The NAM, two metals groups (American Iron and Steel Institute and American Coke and Coal Chemicals Institute), and other industry groups filed petitions with the Supreme Court over EPA's "backdoor rule-making" authority to issue national air quality standards. The court could take the case this fall.
The suit charges the EPA with circumventing a congressional mandate that exempts companies from reporting air emissions of hazardous substances, called a "federally permitted release" (FPR). The guidance virtually eliminates the FPR exemption which will particularly hurt small manufacturers, and yet, EPA claims the rule would have no
substantial impact on small business.
In December, the EPA published an "interim guidance on air emissions," effective immediately, requiring steel mills to report to federal or state emergency response authorities any substances possibly contained in visible emissions not
cited in its permit. Under the interim guidance, "unless a chemical is specifically identified in the permit, it would not be considered a federally permitted release and would have to be reported daily." The guidance essentially attempts to narrowly define the release without complying with standard rule-making procedures calling for long comment periods and public hearings.
The coalition filing the lawsuit estimated that, if left unchecked, the interim guidance would result in up to 2.5 million reports filed in 2000 and cost up to $2 billion in the measurement and calculation of emissions of multiple compounds that facilities are not required to track. The group further argues that the guidance ignores hundreds of industry comments and reverses long-standing agency policy.
New RCRA Rule
EPA has implemented a new Resource Conservation and Recovery Act (RCRA) rule to encourage metals recovery from wastewater treatment sludge. The rule allows large-quantity generators to accumulate sludge on-site for 180 days double the previous 90-day accumulation period if the waste is slated for recycling. The longer storage period allows generators to ship larger quantities of waste less frequently, cutting transportation costs and making recycling more attractive.
Generators must meet certain conditions to take advantage of the rule, including the implementation of pollution prevention practices that reduce the toxicity of the waste and make it more amenable to metals recovery. Waste must be slated for metals recovery, and no more than 16,000 kilograms (35,370 pounds) can be accumulated at any one time.
Other Legislation
Regulatory Reform
Several regulatory reform bills have been introduced recently, spurred by a new report completed by the Office of Management and Budget that found health, safety and environmental regulations cost between $174 billion and $234 billion annually. Economic regulations and paperwork cost billions more.
Congressman David McIntosh (R-IN) introduced the Congressional Accountability for Regulatory Information Act to aid Congress in analyzing federal regulations and ensure the public's understanding of the legal effect of agency guidance documents. To accomplish this, the General Accounting Office (GAO) will be tasked with reviewing agency cost-benefit analyses and alternative approaches to the agencies' chosen regulation. In the Senate, a companion bill (S 1198) was introduced by Senators Shelby (R-AL), Bond (R-MO) and Lott (R-MS).
Another set of companion bills, the Congressional Responsibility Act,
introduced by Representative J.D. Hayworth (R-AZ), and Senator Sam Brownback (R-KS), would require congressional approval of significant agency rules.
Minimum Wage Increase
The House approved an increase in the minimum wage, while simultaneously broadening pension coverage, reducing estate taxes, and repealing the 1999 tax hike on those who sell a business on an installment plan. The bill would raise the $5.15 minimum wage by $1 over two years. A previously passed Senate bankruptcy bill, which contains tax cuts of
$76 billion for certain business over 10 years, would spread the wage increase over three years. Clinton has threatened to veto the bills because of the tax cuts and the extra year to implement the wage increase.
Patients' Bill of Rights
Two issues must be resolved before the House and Senate can agree on a Patients' Bill of Rights bill: Should the bill apply to all HMOs or only to those now under federal regulation; and should a patient have the right to sue his HMO. Most Senate conference committee members oppose the latter. President Clinton has already vowed to veto any bill that denies patients the right to sue.
A Business Roundtable lobbyist says one possible compromise is a measure that lets patients sue in federal court (where large jury awards are less common), but only after completing a mandatory out-of-court appeals process. Such appeals would be before independent groups of physicians who would determine if patients have been improperly
denied benefits.
Another idea is to give consumers the right to sue, but then they must pay a higher premium. Under this scenario, patients could choose the type of dispute resolution mechanism they want in a health care plan, including giving up the right to sue in exchange for lower premiums.
Truck Weight Legislation
The US steel industry is rallying around a proposed piece of federal legislation that would increase the truck weight threshold to 97,000 pounds from the current 80,000-pound limit. Steel industry representatives see the legislation as an opportunity to ship more product on fewer trucks, thereby lowering overall shipment costs.
The bill (HR 1667), sponsored by Collin Paterson (D-MN) and Merrill Cook (R-UT), would allow individual states to adopt a truck weight threshold of up to 97,000 pounds on interstate highways if the single trailer was equipped with a sixth axle for better braking and load-handling capabilities.
In general terms, the weight increase would allow steel producers to haul more coils per truck. Considering that most trucks weigh around 20,000 pounds, under current law they can carry loads up to 60,000 pounds in most states to reach the 80,000-pound threshold. Because some individual steel coils weigh between 40,000 to 50,000 pounds, they often
can transport only one coil. Increasing the threshold would allow truckers to haul twice as many coils per trip.
Proponents say that passage of the measure would reduce truck traffic and, consequently, emissions and highway accidents. Fuel costs also would be lowered, and road repairs reduced because a sixth axle would cause a softer footprint on highways. It would also solve the problem of a lack of uniformity from state to state on truck weights.
ITC Rules On Steel Tariffs
The International Trade Commission (ITC) determined there is
reasonable indication that a US industry has been materially injured by steel wire
rope imports from China, India and Malaysia (but not Thailand) that are
allegedly sold in the US at less than fair value. As a result of the affirmative
determinations in the preliminary phase of the investigation, the Commerce
Department will continue to conduct its antidumping investigations of steel wire
rope imports from the three countries cited, with its preliminary
antidumping determinations due around August 8, 2000.
The ITC's public Steel Wire Rope report (Investigations Nos.
731-TA-868-871, Preliminary) contains the views of the Commission and
information developed during the investigations. Copies of the report (USITC
Publication 3294) are expected to be available after May 15 by calling
202-205-1809 (FAX: 202-205-2104).
In another case, the ITC, in a 5-1 vote, ruled that steelmakers were
not harmed by imports of cold-rolled steel and, as a result, tariffs will not
be imposed on these imports from Argentina, Brazil, Japan, Russia,
South Africa and Thailand. US steelmakers have already announced they
will appeal the decision.
The commissioners rejected the steelmakers' claims that the six
importing countries drove down the price of cold-rolled sheet by dumping
it on the US market. The ruling means that Commerce will not go ahead with plans
to impose duties of more than $590 million from those countries.
FSC Ruling by WTO Debated
House Ways and Means Committee Chairman Bill Archer (R-TX) said
he expects there will have to be a legislative remedy to the recent WTO
ruling against the US with regard to foreign sales corporations (refer to March
issue of WireLine for more details), but for now he is deferring to US negotiators
to craft a compromise.
He would not say what a legislative fix would look like, but acknowledged
it would be substantial because the value of the subsidy to US
companies could be $50 billion during the next 10 years.
Trade Subcommittee Chairman Phil Crane (R-IL) stated he would offer
his own solution a bill establishing a consumption tax on business. Mr.
Crane acknowledged that this was a radical step, but said it is the only way to
have a more sound and fair way of dealing with international taxes.
The Illinois Republican added that he expected negotiations between
USTR and the Europeans on this issue to go on until the October 1 deadline.
US corporations are urging the Clinton Administration to quickly find
a solution to the problem in order to avoid a new trade war with Europe.
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