Congress urged to revive domestic steel industry

Great Lakes Commission calls for aggressive action on key sector of regional economy

Ann Arbor, Mich. — The federal government needs to adopt an aggressive policy to combat problems in the domestic steel industry, according to a leading public policy agency in the Great Lakes region.

The Great Lakes Commission, an interstate compact agency established under state and U.S. federal law, is urging the U.S. government to pursue a long-term strategy to boost steel exports and reduce unfair and illegal competition from abroad. The Great Lakes region has been hit hard by a flood of cheap imported steel dumped on the U.S. market. Nationally, this has caused “serious injury” to the U.S. steel industry, according to an October 22 ruling by the U.S. International Trade Commission.

“A high level of steel imports in recent years has resulted in many problems for the steel sector and supporting iron ore mining industry, including an increasing level of job loss,” said Chairman Nathaniel E. Robinson. “We urge the International Trade Commission and the Department of Commerce to consider our policy action as remedies are devised.”

In a policy resolution unanimously adopted by its eight member states, the Commission calls upon the federal government to conclude an effective multilateral steel agreement with trading partners that will eliminate all subsidies and other unfair trade practices while preserving the ability of national industries to use trade laws to address unfair trade practices.

“Illegally subsidized imports have had a devastating effect on iron ore mining, steel making and Great Lakes shipping in recent years,” said George Ryan, president of the Lake Carriers’ Association. “Our productivity is as good or better than anyone in the world, but when your competitors are getting a free handout at home, no unsubsidized industry can keep pace.”

The resolution also calls upon the federal government to address foreign trade barriers by linking access to the U.S. market to reciprocal openings for high-value U.S. steel products. Furthermore, the federal government is urged to take an active role in resolving the third world debt crisis, which has led some countries to “dump” steel in a desperate bid for revenue.

Other Commission recommendations include:

  • Discouraging international finance agencies and foreign governments from supporting construction of new steel facilities while steel remains in oversupply worldwide.
  • Linking access to the U.S. market, where appropriate, to efforts by developing countries to raise labor standards, including wages, benefits and health and safety standards, in their export steel industries.
  • Making the establishment of comparable environmental standards for foreign industries which export to the U.S. a major goal of U.S. trade and foreign policy.
  • Promoting the development of state adjustment assistance strategies to help workers and communities cope with changes in the world steel industry.

Great Lakes states account for 65 percent of domestic steel production and all of the nation’s production of iron ore. It is estimated that if Michigan’s Marquette range and Minnesota’s Mesabi range were to close due to low demand, the Upper Peninsula and Northern Minnesota could lose more than $1 billion in economic activity, a serious blow in a region lacking economic diversity.

The recent bankruptcy filing by Bethlehem Steel made it the 24th U.S. steel firm to seek court protection since 1998. Throughout the 1990s, rising levels of imported steel resulted in an average loss of 5,000 U.S. steel industry jobs each year.

Large steel producers who create new steel from raw ore have been particularly affected. Such producers play a critical role in the nation’s security, with the capacity to turn out large quantities of steel for defense manufacturing in the event of a national emergency.

For immediate release: November 9, 2001
Contact: Mike Donahue, mdonahue@glc.org, office: 734-665-9135

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The Great Lakes Commission, chaired by Nathaniel E. Robinson (Wisconsin), is a nonpartisan, binational compact agency created by state and U.S. federal law and dedicated to promoting a strong economy, healthy environment and high quality of life for the Great Lakes – St. Lawrence region and its residents. The Commission consists of state legislators, agency officials, and governors’ appointees from its eight member states. Associate membership for Ontario and Québec was established through the signing of a “Declaration of Partnership.” The Commission maintains a formal Observer program involving U.S. and Canadian federal agencies, tribal authorities, binational agencies and other regional interests. The Commission offices are located in Ann Arbor, Michigan.

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