```

[House Report 106-52]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
  1st Session           HOUSE OF REPRESENTATIVES                 106-52

=======================================================================

 
                   MEASURES RELATING TO STEEL IMPORTS

                                _______
                                

 March 15, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                             ADVERSE REPORT

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 975]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 975) to provide for a reduction in the volume of 
steel imports, and to establish a steel import notification and 
monitoring program, having considered the same, report 
unfavorably thereon without amendment and recommend that the 
bill do not pass.

                                CONTENTS

                                                                   Page
  I. Introduction................................................     2
          A. Purpose and Summary.................................     2
          B. Background..........................................     2
          C. Legislative History.................................     4
 II. Explanation of the Bill.....................................     4
          A. Section 1: Reduction in Volume of Steel Imports.....     4
          B. Section 2: Steel Import Notification and Monitoring 
              Program............................................     6
III. Voice of the Committee......................................     8
 IV. Budget Effects of the Bill..................................     8
          A. Committee Estimate of Budgetary Effects.............     8
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures.......................................     8
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     8
  V. Other Matters Required to be Discussed Under the Rules of the 
     House.......................................................    12
          A. Committee Oversight Findings and Recommendations....    12
          B. Summary of Findings and Recommendations of the 
              Government Reform and Oversight Committee..........    12
          C. Constitutional Authority Statement..................    12
          D. Information Relating to Unfunded Mandates...........    12
 VI. Correspondence..............................................    13
          A. Correspondence from the Speaker of the House and the 
              Majority Leader....................................    13
          B. Correspondence from Chief of Staff of the President 
              of the United States...............................    13
VII. Additional Views............................................    15
VIII.Dissenting Views............................................    16

                            I. INTRODUCTION

                         A. PURPOSE AND SUMMARY

    Within 60 days of enactment, H.R. 975 would impose quotas 
for a three year period on U.S. imports of steel, based on 
tonnage, equal to the monthly average of such imports during 
the 36 months prior to July 1997. In addition, H.R. 975 would 
require the Secretary of Commerce to establish a steel import 
notification and monitoring program, within 30 days of 
enactment, which includes a requirement that any person 
importing steel into the United States first obtain an import 
notification certificate and that data collected from the 
certificate applications be made publicly available.

                             B. BACKGROUND

    During the first 10 months of 1998, U.S. steel imports grew 
at record levels, rising 30 percent over the same period in 
1997. Increases were particularly high in key products such as 
hot-rolled sheets and coils, where imports rose 66.3 percent in 
the first 10 months of 1998 versus the same period in 1997. 
Overall, import penetration grew from 24.2 percent in the first 
10 months of 1997 to 29.5 percent during the same period of 
1998. Steel imports from Japan, Russia, and Korea together 
accounted for 78 percent of the increase. At the same time, 
U.S. steel production for 1998 was at a near record level of 
102 million metric tons (down slightly from the record of 105 
million set in 1997), and steel demand in the United States 
during 1998 was the strongest in history, at over 141 million 
metric tons.
    In response to the increase in steel imports, segments of 
the U.S. industry have sought relief under U.S. trade laws. On 
September 30, 1998, U.S. steel producers and workers filed 
antidumping petitions at the Commerce Department on U.S. 
imports of hot-rolled steel from Japan, Russia, and Brazil, and 
a countervailing duty petition on imports from Brazil. The U.S. 
International Trade Commission (ITC) issued a preliminary 
injury determination on these petitions on November 13, 1998, 
finding that imports from all three countries threatened the 
domestic industry with injury but did not cause present injury. 
On November 23, 1998, Commerce issued a preliminary ruling of 
critical circumstances with respect to hot-rolled steel imports 
from Japan and Russia. Based on this finding, importers may be 
retroactively assessed dumping duties reaching back 90 days 
before the preliminary determination to November 14, 1998, if 
an antidumping order is issued. As a result of the critical 
circumstances finding, importers have been put on notice of 
potential antidumping duty assessments.
    Preliminary steel import statistics from the Commerce 
Department for January 1999 indicate a decrease of 1.2 million 
metric tons in monthly steel imports entering the United States 
from levels reached prior to the critical circumstances finding 
in the antidumping cases against Russia and Japan. The result 
of the critical circumstances finding, which put importers on 
notice of potential antidumping duty liability, was to 
virtually stop imports of hot-rolled steel from countries 
involved in pending investigations and to reduce by 70 percent 
the level of all hot-rolled imports entering the United States. 
Overall, imports of all steel mill products from all sources 
declined by 34 percent from their November levels, according to 
preliminary January 1999 statistics.
    On February 12, 1999, the Commerce Department issued a 
preliminary affirmative determination of dumping with respect 
to Japan (margins ranging from 25.14 to 67.59 percent) and 
Brazil (margins of 50.66 to 71.02 percent). In addition, 
Commerce made an affirmative preliminary subsidy determination 
with respect to Brazil, with margins ranging from 6.62 to 9.45 
percent. Commerce's final determinations with respect to Japan 
and Brazil are due April 28, unless extended, and the ITC's 
final determinations are due June 2, unless extended.
    On February 22, 1999, Commerce announced a preliminary 
affirmative determination of dumping with respect to Russia 
(margins ranging from 71 to 218 percent). On the same day, 
Commerce reached tentative agreements with Russia to (1) 
suspend the antidumping investigation of Russian hot-rolled 
steel products and roll back those imports to 1996 levels; and 
(2) set imports of Russian steel at 1997 levels on a 
comprehensive list of other steel products. A Memorandum of 
Understanding was also initialed committing Commerce and the 
Russian Ministry of Trade to work together to assist the 
Russian government and business communities to eliminate unfair 
trade practices. Because the agreement on hot-rolled steel 
involves the suspension of the current antidumping 
investigation with respect to Russia, the views of the 
petitioners in the case must be considered before the agreement 
is finalized.
    On December 30, 1998, another segment of the U.S. steel 
industry filed a petition for relief with the ITC. This 
petition, filed under section 201 of the Trade Act of 1974 on 
imports of steel wire rod, alleged that imports of the product 
are a substantial cause of serious injury to the U.S. industry. 
An injury determination on that petition is due mid-May.
    On February 16, 1999, the U.S. steel industry and workers 
filed additional antidumping and countervailing duty petitions 
at the Commerce Department on imports of carbon steel plate 
imports from France, India, Indonesia, Italy, Korea, and 
Macedonia. Antidumping petitions only were also filed against 
the Czech Republic and Japan on carbon steel plate. Commerce 
initiated these investigations on March 8, 1999. Preliminary 
injury determinations by the ITC are due April 12, 1999. 
Preliminary countervailing duty determinations are due by May 
12, 1999 unless extended, and preliminary antidumping 
determinations are due by July 26, 1999 unless extended.

                         c. legislative history

Committee action

    H.R. 975 was introduced on March 4, 1999 by Representative 
Visclosky et alia and was referred to the Committee on Ways and 
Means. On March 5, 1999, Chairman Archer received a letter from 
the Speaker of the House and the Majority Leader requesting 
that the Committee consider and report unfavorably H.R. 975, 
despite their ``share[d] . . . misgivings'' about the policy, 
in order to ensure that the House will consider this measure 
under orderly legislative procedures (see attached letter). On 
March 10, 1999, the Committee ordered H.R. 975 reported 
adversely without amendment to the House by a voice vote with a 
quorum present. The Administration stated its opposition to the 
legislation at the Committee meeting (see attached letter).

Legislative hearing

    The Subcommittee on Trade held a hearing on February 25, 
1999, on steel trade issues. At the hearing, Members of 
Congress, as well as representatives of the steel industry and 
steel workers expressed concern about the current state of the 
U.S. steel industry. The Secretary of Commerce, William Daley, 
and the U.S. Trade Representative, Charlene Barshefsky, 
testified as to the Administration's actions in response to the 
increase in steel imports and the status of the ongoing 
antidumping and countervailing duty investigations into hot-
rolled steel. Representatives of U.S. steel users testified as 
to the impact of restricting access to steel imports on other 
sectors of the U.S. economy.

                      II. EXPLANATION OF THE BILL

           a. section 1: reduction in volume of steel imports

Present law

    No quotas exist under current U.S. law on imports of steel 
products.
    Title VII of the Tariff Act of 1930, as amended, provides 
for the collection of antidumping or countervailing duties only 
after an administrative determination that foreign merchandise 
is being sold in the U.S. market at less than fair value, or 
that the imports are subsidized, and that such imports are 
materially injuring, or threatening material injury, to the 
U.S. industry.
    Sections 201-204 of the Trade Act of 1974, commonly known 
as the ``safeguard'' law, sets forth the procedures for the 
President to take action, including import relief, to 
facilitate efforts by a domestic industry to make a positive 
adjustment to import competition. Relief is granted under 
Presidential discretion only if the ITC finds that the article 
is being imported in such increased quantities as to be a 
substantial cause of serious injury to the industry.

Explanation of provision

    H.R. 975 directs the President, within 60 days of 
enactment, to take the necessary steps by imposing quotas, 
tariff surcharges, negotiated enforceable voluntary export 
restraint agreements, or otherwise, to ensure that the volume 
of steel products imported into the United States during any 
month, based on tonnage, does not exceed the average volume of 
steel products that was imported monthly into the United States 
during the 36-month period preceding July 1997. The quotas in 
H.R. 975 apply to the following categories of steel products: 
semifinished, plates, sheets and strips, wire rods, wire and 
wire products, rail type products, bars structural shapes and 
units, pipes and tubes, iron ore, and coke products. The quotas 
expire at the end of the 3-year period beginning 60 days after 
enactment.
    H.R. 975 directs the Secretary of the Treasury, through the 
U.S. Customs Service, and the Secretary of Commerce to 
implement a program for administering and enforcing the quotas 
in the bill and authorizes the U.S. Customs Service to refuse 
entry into the customs territory of the United States of any 
steel products that exceed the allowable levels of imports of 
such products.

Reasons for Committee action

    The Committee sympathizes with the current situation faced 
by the U.S. steel industry and its workers, and notes that the 
steel industry is not alone in undergoing difficult times. The 
U.S. oil and gas industry has also experienced a downturn in 
the wake of low priced imports. In addition, U.S. farmers and 
ranchers have gone through a difficult period as a result of 
the drying up of export markets and drop in commodity prices.
    The Committee on Ways and Means reports H.R. 975 adversely 
primarily because it would impose a quota on steel imports 
outside of U.S. trade remedy laws and U.S. obligations in the 
World Trade Organization (WTO). Specifically, the quotas under 
H.R. 975 would not be based on a determination of whether the 
imports are causing or threatening serious injury or whether 
unfair trade or subsidization is involved, as required by WTO. 
In addition, the bill would apply to steel imports coming to 
the United States from all countries, even fairly traded 
imports.
    The Committee also believes that the quotas in H.R. 975 
threaten thecompetitiveness of U.S. downstream steel users who 
manufacture products like defense equipment, cars, and machinery, and 
who employ 40 times as many U.S. workers as the integrated steel mills. 
The Committee is concerned that increased demand may create a situation 
in which the domestic industry is unable to supply sufficient 
quantities of particular products because of import limitations imposed 
by the quotas. In addition, in some circumstances, the domestic 
industry may be able to supply the product, but at aberrational prices, 
resulting in a functional lack of availability.
    Moreover, H.R. 975 makes U.S. exporters vulnerable to 
retaliation in overseas markets. In fact, the United States, 
the Committee believes, would be setting a bad example for 
countries in the midst of a financial crisis, particularly 
those which have resisted closing their own markets in times of 
trouble.
    The Committee is also concerned about the impact of the 
private sector mandate contained in the bill, as defined under 
the Unfunded Mandates Reform Act (UMRA) of 1995 (Public Law 
104-4). The Congressional Budget Office (CBO) has determined 
that the direct costs to the private sector resulting from the 
enactment of H.R. 975 would exceed the statutory threshold each 
year that the bill is in effect. Specifically, CBO estimates 
that the quotas in H.R. 975 would result in higher steel market 
prices costing the private sector nearly $400 million in 2000, 
$340 million in 2001, and $150 million in 2002.
    Finally, the Committee believes that the actions taken by 
the Administration in response to the increase in steel imports 
last year are already having the intended effect of reducing 
the level of U.S. steel imports. In particular, hot-rolled 
steel imports from Japan, Russia, and Brazil, which are now 
subject to high preliminary antidumping margins, have virtually 
stopped according to preliminary January 1999 import 
statistics. Hot-rolled imports from all countries, even those 
not subject to investigation have dropped 70 percent since 
November and imports of all steel mill products from all 
sources are down 34 percent over the same time frame.

Effective date

    The provision is effective within 60 days of enactment.

     b. section 2: steel import notification and monitoring program

Present law

    The Census Bureau within the Department of Commerce 
compiles and releases trade statistics under a directive from 
the Office of Management and Budget (OMB) related to the 
announcement of ``Leading Economic Indicators.'' Statistics are 
generally released six to eight weeks after entry. In early 
1999, the Secretary of Commerce received approval from OMB to 
release monthly steel import statistics compiled by the Census 
Bureau 20 days earlier than usual, approximately one month 
after entry.

Explanation of provision

    H.R. 975 directs the Secretary of Commerce, in consultation 
with the Secretary of the Treasury, to establish a steel import 
notification and monitoring program, not later than 30 days 
after enactment, which includes a requirement that any person 
importing a product classified under chapter 72 or 73 of the 
Harmonized Tariff Schedule (HTS) of the United States obtain an 
import notification certificate before such products are 
entered into the United States.
    To obtain a steel import notification certificate, H.R. 975 
requires an importer to submit an application to the Secretary 
of Commerce containing:
          (A) the importer's name and address;
          (B) the name and address of the supplier of the goods 
        to be imported;
          (C) the name and address of the producer of the goods 
        to be imported;
          (D) the country of origin of the goods;
          (E) the country from which the goods are to be 
        imported;
          (F) the U.S. Customs port of entry where the goods 
        will be entered;
          (G) the expected date of entry of the goods into the 
        United States;
          (H) a description of the goods, including the 
        classification of such goods under the HTS;
          (I) the quantity (in kilograms and net tons) of the 
        goods to be imported;
          (J) the cost insurance freight (CIF) and free 
        alongside ship (FAS) values of the goods to be entered;
          (K) whether the goods are being entered for 
        consumption or for entry into a bonded warehouse or 
        foreign trade zone;
          (L) a certification that the information furnished in 
        the certificate application is correct; and
          (M) any other information the Secretary of Commerce 
        determines to be necessary and appropriate.
    In the case of merchandise classified under chapter 72 or 
73 of the HTS that is initially entered into a bonded warehouse 
or foreign trade zone, H.R. 975 would require a steel import 
notification certificate before the merchandise is entered into 
the customs territory of the United States.
    H.R. 975 directs the Secretary of Commerce to issue a steel 
import notificationcertificate to any person who files an 
application that meets the requirements of this section. Certificates 
would be valid for a period of 30 days from the date of issuance.
    H.R. 975 further directs the Secretary of Commerce to 
compile and publish on a weekly basis information obtained from 
steel import notification certificate applications concerning 
steel imports into the United States including the HTS 
classification (to the tenth digit), the country of origin, the 
port of entry, quantity, value of steel imported, and whether 
the imports are entered for consumption or are entered into a 
bonded warehouse or foreign trade zone. Such information is 
also to be compiled in aggregate form and made available to the 
public by the Secretary of Commerce on a weekly basis by public 
posting on an Internet website. The information provided under 
this section is in addition to any information otherwise 
required by law.
    H.R. 975 authorizes the Secretary of Commerce to prescribe 
reasonable fees and charges to defray the costs of carrying out 
the provisions of this section, including a fee for issuing a 
certificate under this section.
    The bill clarifies that the Secretary of Commerce shall 
make publicly available all information required to be released 
pursuant to this Act, including information obtained regarding 
imports from a foreign producer or exporter that is the only 
producer or exporter of goods subject to this section from a 
foreign country.
    Finally, H.R. 975 authorizes the Secretary of Commerce to 
prescribe such rules and regulations relating to the steel 
import notification and monitoring program as may be necessary 
to carry out the provisions of this section.

Reasons for Committee action

    The Committee believes that a new steel import notification 
and monitoring program is unnecessary in light of the steps 
taken earlier this year by the Commerce Department to provide 
steel trade information on an expedited basis. Under Commerce's 
expedited program, information is made available about three 
weeks after the end of the month. (normal procedures permit the 
release of information six to eight weeks after entry). H.R. 
975 would make information available only two weeks earlier 
that Commerce's expedited program.
    The Committee is also concerned that H.R. 975 would permit 
the Secretary of Commerce to impose fees to cover the cost of 
the steel import notification and monitoring program when the 
current system, which provides for expedited release of 
information already collected from importers, costs firms 
nothing. CBO has estimated this added expense will cost the 
private sector about $500,000 annually. This added expense, as 
well as the lack of an expiration date associated with the 
program, raises potential problems with respect to U.S. 
obligations in the WTO.
    Finally, the Committee is concerned that H.R. 975 would 
make available some information which may not be currently 
available to the public, potentially posing business 
confidentiality problems.

Effective date

    The provision is effective within 30 days of enactment.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee in its consideration of 
H.R. 975.

                       MOTION TO REPORT THE BILL

    H.R. 975 was ordered reported adversely without amendment 
by a voice vote with a quorum present.

                     IV. BUDGET EFFECTS OF THE BILL

               A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of H.R. 975, as 
reported: The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

    B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
provisions of H.R. 975 would decrease revenues by $43 million 
between fiscal year 2000 and 2002, and would increase 
discretionary spending by $2 million in 2000 and by less than 
$500,000 a year thereafter.

      C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance of clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.
                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 15, 1999.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 975, a bill to 
provide for a reduction in the volume of steel imports and to 
establish a steel import notification and monitoring program.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Hester 
Grippando (for revenues), Mark Hadley (for spending), and 
Lesley Frymier (for the private sector impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 975--A bill to provide for reduction in the volume of steel 
        imports, and to establish a steel import notification and 
        monitoring program

    Summary: H.R. 975 would temporarily set a limit on imports 
of steel and steel products into the United States and would 
establish a steel import notification and monitoring program. 
CBO estimates that this bill would reduce governmental receipts 
by $43 million between 2000 and 2002. CBO also estimates that 
implementing the bill would increase discretionary spending by 
$2 million in 2000 and by less than $500,000 a year thereafter, 
assuming appropriation of the necessary amounts. Because 
enacting H.R. 975 would affect receipts, pay-as-you-go 
procedures would apply.
    H.R. 975 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments. The bill 
would impose new private-sector mandates on importers of steel 
products. Based on information provided by government and 
industry sources, CBO estimates that the direct costs of the 
new private-sector mandates would exceed the statutory 
threshold established in UMRA ($100 million in 1996, adjusted 
annually for inflation) in fiscal years 2000 through 2002.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 975 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars
                                                     -----------------------------------------------------------
                                                        1999      2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES
 
Estimated revenues..................................     (\1\)       -21       -16        -6         0         0
 
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated authorization level.......................         0         2     (\1\)     (\1\)     (\1\)     (\1\)
Estimated outlays...................................         0         2     (\1\)     (\1\)     (\1\)    (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

    Basis of estimate: For the purpose of this estimate, CBO 
assumes that H.R. 975 will be enacted by July 1, 1999, and 
implemented on September 1, 1999.

                                Revenues

    Section 1 of H.R. 975 would charge the President to take 
necessary steps to limit the volume of steel products imported 
into the United States during the three-year period starting 60 
days after enactment. Imports could not exceed the average 
volume of steel products imported into the United States during 
the 36-month period preceding July 1997. Categories of steel 
products covered by H.R. 975 include semi-finished steel 
plates, sheets and strips, wire rods, wire and wire products, 
rail-type products, bars, structural shapes and units, pipes, 
and tubes, iron ore, and coke products. This estimate assumes 
that import quotas are imposed, but the projected revenue loss 
would be the same if the President negotiated voluntary export 
restraint agreements. CBO estimates that H.R. 975 would reduce 
revenues by less than $500,000 in fiscal year 1999, and by $43 
million over the 1999 through 2004 period.
    CBO estimated the bill's impact on revenue based on recent 
steel import forecasts in Standard and Poor's Fourth Quarter 
1998 ``Steel Industry Review'' and WEFA's February 1999 ``Steel 
Industry Outlook.'' Steel import projections from these 
forecasts were adjusted to match the overall import projections 
in CBO's January 1999 forecast. The forecast assumes that 
imports will fall from the 1998 level because of lower 
projected domestic demand, unusually high domestic inventories, 
lower projected domestic prices, and the effect of recent trade 
cases brought against U.S. importers of steel. Under current 
law, CBO projects steel imports to be 32 million short tons in 
2000 and 30 million short tons in 2001. CBO projected the 
consumption value of steel imports using census historical data 
on the consumption value of steel and Standard and Poor's 
forecast of changes in steel import prices. Revenue losses were 
estimated by applying a trade-weighted duty rate adjusted for 
tariff reductions scheduled by the World Trade Organization 
(WTO).

                   Spending Subject to Appropriation

    Section 2 would require importers of steel mill products to 
obtain a certificate from the Department of Commerce before 
such products are shipped. The Department of Commerce would 
collect trade data from steel importers and provide the data to 
the public through an Internet Web site. Information from the 
Department of Commerce and experience with similar programs 
suggest that most of the costs would be for developing the 
certificate system and Web site, with negligible amounts for 
maintaining the system. Subject to appropriation of the 
necessary amounts, CBO estimates that implementing section 2 
would cost about $2 million in 2000 and less than $500,000 in 
each subsequent year. In addition, H.R. 975 would allow the 
Department of Commerce to impose fees that may offset some or 
all of the costs associated with this section. The amounts 
collected are not likely to be significant.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in governmental receipts that are subject to pay-as-
you-go procedures are shown in the following table. For the 
purposes of enforcing pay-as-you-go procedures, only the 
affects in the current year, the budget year, and the 
succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          By fiscal year, in millions of dollars
                                                                 ---------------------------------------------------------------------------------------
                                                                   1999    2000    2001    2002    2003    2004    2005    2006    2007    2008    2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Not applicable
Change in outlays...............................................  ......  ......  ......  ......  ......  ......  ......  ......  ......  ......  ......
Changes in receipts.............................................       0     -21     -16      -6       0       0       0       0       0       0       0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
S. 975 contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Estimated impact on the private sector: H.R. 975 would 
impose new private-sector mandates on importers of steel 
products. Based on information provided by government and 
industry sources, CBO estimates that the direct costs of the 
new private-sector mandates would exceed the statutory 
threshold established in UMRA ($100 million in 1996, adjusted 
annually for inflation) in fiscal years 2000 through 2002.
    H.R. 975 would effectively prohibit imports of certain 
steel products in excess of the average volume of steel 
products that was imported monthly into the United States 
during the 36-month period preceding July 1997. Such a quota 
would reduce the availability of imported steel and raise 
prices faced by U.S. importers of steel. Just how much prices 
will rise is uncertain, but based on published estimates of 
demand elasticities for steel products, CBO estimates the 
increased cost to importers would be nearly $400 million in 
2000, $340 million in 2001, and $150 million in 2002.
    H.R. 975 also would require importers of certain products 
to apply for and obtain a steel import notification certificate 
from the Department of Commerce. Although the Secretary of 
Commerce would have the authority to charge a fee for issuing a 
certificate, the Department of Commerce was unable to provide 
CBO with any information on the establishment of such a fee. If 
a reasonable fee were established, CBO estimates that the 
direct cost to importers to obtain a certificate would be about 
$500,000 annually.
    H.R. 975 would likely yield benefits and impose other costs 
on the private sector. If domestic steel prices rise, H.R. 975 
would benefit U.S. steel producers and impose costs on U.S. 
consumers of steel. By increasing the gap between the domestic 
and world price of steel, the bill could result in an increase 
in imports of finished products from foreign countries and 
place some U.S. products at a competitive disadvantage in 
foreign markets.
    Estimate prepared by: Federal Revenues: Hester Grippando; 
Federal Spending: Mark Hadley; Impact on the Private Sector: 
Lesley Frymier.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis and Tom Woodward, Assistant 
Director for Tax Analysis.

 V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing information and 
information from the Administration, believes that imposing 
quotas on U.S. steel imports by enacting H.R. 975 would be 
unwise and counterproductive.

B. SUMMARY OF FINDINGS AND RECOMMENDATIONS OF THE GOVERNMENT REFORM AND 
                          OVERSIGHT COMMITTEE

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that no 
oversight findings or recommendations have been submitted by 
the Committee on Government Reform and Oversight with respect 
to the subject matter contained in H.R. 975.

                 C. CONSTITUTIONAL AUTHORITY STATEMENT

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * *'').

              D. INFORMATION RELATING TO UNFUNDED MANDATES

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act (UMRA) of 1995 (Public Law 
104-4).
    The Committee has determined that the following provisions 
of H.R. 975 contain Federal mandates on the private sector: (1) 
the imposition of quotas on U.S. steel imports, and (2) the 
establishment of the steel import notification and monitoring 
program. The direct costs to the private sector are significant 
and are estimated to exceed the statutory threshold established 
in UMRA ($100 million in 1996, adjusted annually for inflation) 
in fiscal years 2000 through 2002. Specifically, CBO estimates 
that the quotas in H.R. 975 would result in higher prices in 
the steel market costing the private sector nearly $400 million 
in 2000, $340 million in 2001, and $150 million in 2002. In 
addition, CBO estimates that the establishment of the steel 
import notification and monitoring program would cost the 
private sector an additional $500,000 per year.
    H.R. 975 contains no intergovernmental mandate as defined 
in the UMRA and would not affect the budgets of state, local, 
or tribal governments.
    The Committee agrees with the analysis provided by the CBO 
as to the impact on the private sector of the price increases 
that would result in the steel market from the imposition of 
steel quotas, as well as costs to the private sector associated 
with the establishment of the steel import notification and 
monitoring program.

                           VI. CORRESPONDENCE

                             Congress of the United States,
                                     Washington, DC, March 5, 1999.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
Longworth House Office Building, Washington, DC.
    Dear Bill: It is our request that the Ways and Means 
Committee consider and report unfavorably the Visclosky-Quinn 
steel legislation (H.R. 975) next week. H.R. 975 includes the 
text of H.R. 506, along with legislative language that 
establishes a steel monitoring program. While we share your 
misgivings about this policy, the committee's action ensures 
that the House will consider this measure under orderly 
legislative procedures.
    Thank you for your consideration of this matter.
                                Sincerely,
                                   Dennis Hastert,
                                           Speaker.
                                   Dick Armey,
                                           Majority Leader.
                              ----------                              

                                           The White House,
                                        Washington, March 10, 1999.
Hon. Bill Archer,
Chairman, Ways and Means Committee,
House of Representatives, Washington, DC.
    Dear Chairman Archer: I want to convey to you the 
Administration's opposition to H.R. 975 and, in particular, its 
mandate that the President take action to roll back steel 
imports to the average monthly import levels preceding the 
current import surge.
    The President is determined to maintain the U.S.' strong 
manufacturing base and the good jobs it provides. The President 
share the co-sponsors deep concern about the impact on our 
steelworkers, communities and companies of the surge in steel 
imports. He believes that the best way to address the current 
steel crisis is by insisting that other countries play by the 
international trade rules, just as the United States will 
continue to abide by those rules. The President's commitment to 
effective, vigorous and timely enforcement of our trade laws is 
producing results. Imports of carbon hot-rolled steel have 
fallen 70% between November and January. Imports of these 
products also have virtually ceased from Russia and Japan (down 
98% and 96% respectively) and declined 76% from Brazil. We are 
committed to sustained implementation of this place and the 
expeditious resolution of pending cases.
    Quotas imposed outside the World Trade Organization (WTO)-
consistent processes contained in our trade laws (section 201 
safeguards law or the quota suspension agreement provisions in 
our antidumping and countervailing duty laws) violated our 
international trade obligations. These quotas would not be 
based on a determination of whether the imports are causing or 
threatening serious injury, or whether unfair trade or 
subsidization is involved as required by WTO. Moreover, our 
current laws already provide the means for U.S. industry and 
workers to request an investigation and, if a threat of injury 
is demonstrated, quotas or other trade remedies can be imposed 
in a WTO consistent manner. In addition, when the orderly and 
thorough procedures mandated by our trade laws are followed, we 
can take into account the full range of U.S. industry and 
worker concerns and fashion remedies that do not result in 
additional market distortion, import shortages, excessive price 
hikes or retaliation that could harm U.S. export industries and 
customers.
    We believe that implementing H.R. 975 constitutes a 
violation of our international obligations under the WTO and is 
not in our nation's economic interest. Because of these 
concerns, the President's senior advisors would recommend that 
the President veto the bill.
    Nonetheless, the steel crisis has demonstrated that there 
is room for improvements to our trade laws to ensure they 
deliver strong, effective relief in an expeditious manner, 
while maintaining their consistency with our international WTO 
obligations. We believe the legislation proposed by Congressman 
Levin constitutes a constructive approach, and we stand ready 
to work with him and other members of Congress to develop a 
bill that we could recommend the President sign.
            Sincerely,
                                                      John Podesta.

                         VII. ADDITIONAL VIEWS

    We strongly oppose this legislation for two reasons and 
urge its rejection by the House as a result. We recognize the 
difficulty facing steel workers and companies. What we find 
unacceptable is the way in which steel import restrictions 
imposed by this bill would place other Americans at risk while 
ignoring the plight of other working people who have seen 
imports destroy their jobs in other industries.
    There is no doubt that this legislation poses a risk of 
retaliation against other American industries and those they 
employ. The World Trade Organization agreement requires member 
states to meet specific tests on causation and harm before 
import restrictions may be adopted in defense of one's domestic 
industries. H.R. 975 in no way meets the requirements we 
accepted in trade agreements.
    Failing to adhere to the rules by limiting steel imports 
will entitle other nations to restrict our exports. American 
jobs tied to those exports will be at risk. For export-oriented 
industries such as American agriculture, the results will be 
lost income and lost jobs. Acting hastily without taking 
farmers's and others' concerns into account is foolish.
    Equally disturbing to us, however, is the favoritism 
embodied in this bill. H.R. 975 only recognizes the problems of 
one industry. Our constituents in the oil and gas industry have 
seen 30,000 jobs vanish in the last year. That loss is three 
times the amount of steel jobs lost in the same period. Low oil 
prices place our ability to preserve domestic, secure supplies 
of crude at risk. It disturbs us that no one seems willing to 
take drastic steps on behalf of our constituents. We can assure 
you that our constituents who have lost their jobs in the oil 
trade feel the pain of unemployment no less than the steel 
workers H.R. 975 seeks to help. We see no reason to favor steel 
over other working Americans in industries which are also 
struggling.
    If the United States is going to abandon international 
trade rules we fought hard for during the past half century, we 
should consider the risks and equities involved. We should not 
play favorites by sacrificing or ignoring the needs of other 
working people and industries. H.R. 975's clear favoritism and 
the immense potential for harm it poses causes us to oppose the 
bill and we urge our colleagues to do the same.

                                   Bill Thomas.
                                   Wes Watkins.
                                   Jim McCrery.

         VIII. DISSENTING VIEWS OF REPRESENTATIVE PHIL ENGLISH

    I applaud the Committee's decision to report this bill to 
the full House of Representatives. I believe that the crisis 
facing the U.S. steel industry and the lack of effective 
response by the Clinton/Gore Administration has forced the 
Congress to take action. I very much regret that circumstances 
have brought us to the point that Congressional action was 
necessary. I believe, and I think that many parties agree, that 
is would not be necessary for us to consider this legislation 
today if the Administration had used all of the tools available 
to it under current laws and consistent with all of our 
international obligations.
    I support this legislation and urge its passage by the full 
House of Representatives. Section 1 of H.R. 975 will reduce the 
burden of imports into our market to pre-crisis levels and will 
help to limit the damage done to communities, workers, and 
firms in the U.S. steel industry in the short term. Section 2 
of the bill will establish an effective import monitoring 
system. Many of our trading partners already have systems for 
this purpose in place. The steel import notification and 
monitoring system proposed, which is modeled on similar systems 
currently in use by our largest trading partners, Canada and 
Mexico, would allow the U.S. government to receive and analyze 
critical import data in a more timely manner and allow industry 
to determine more quickly whether unfair imports are disrupting 
the market.

                               background

    The American steel industry is facing a crisis due to an 
immense surge of illegally dumped and subsidized foreign steel 
imports. Since mid 1997, many foreign markets have been rocked 
by economic and financial crises. One consequence of these 
financial crises has been the significant drop in demand for 
steel products in foreign markets. When combined with 
preexisting overcapacity and subsidized foreign producers, the 
drying up of foreign demand for steel has led many countries to 
attempt to illegally unload their excess steel onto the U.S. 
market.
    Since the 1980s the American steel industry has reinvented 
itself as on of the most efficient, most competitive in the 
world. Through sacrifice by the industry and its workers, 
streamlining and investments, the U.S. steel industry has 
nearly tripled productivity. The new U.S. steel industry can 
compete against anyone in the world. The sad part of this story 
is that our industry plays by the rules and has restructured 
itself to be a model of economic efficiency. It is only through 
illegal and unfair trading practices that foreign producers 
have been able to undercut U.S. producers.
    Import volumes in 1998 reached record levels, surging 33 
percent over 1997. And 1997 was itself a record year for steel 
imports. Imports have surged over a wide variety of product 
lines. We have recently seen, in response to trade cases filed 
by the industry and unions, a decline in certain products that 
are subject to duties that would be imposed by the final 
disposition of the cases. But steel is still flowing in massive 
quantities from countries not covered and in the form of 
products not listed by the cases. Also it is entirely possible 
that imports have declined temporarily because we're simply out 
of storage space at U.S. ports.
    This crisis is precisely the reason why the Congressional 
Steel Caucus, Republicans and Democrats together, have been 
urging the Administration to use all of the tools at its 
disposal under our trade laws to take decisive action to 
address this crisis. So far, we have all been disappointed by 
the Administration's general lack of concrete, effective 
action.
    At the hearing on February 25, 1999, before the Ways and 
Means' Subcommittee on Trade, I stated that ``the question 
before us today is this: What can Congress do to stop the 
current steel crisis and reduce the possibility of another 
crisis that could be devastating to the industry and its 
workers?''
    I concluded that we needed legislative action. Passage of 
H.R. 975 meets the test of addressing the current crisis in the 
short term and the import monitoring language would help the 
U.S. steel industry and its workers discern future import 
surges while there is still time to prevent unnecessary damage 
to our economy. I believe that there is additional room for 
legislative action to strengthen and enhance our trade laws so 
that they can more effectively enforce a level playing field.

                               discussion

    I find it interesting that, at this late date, the 
Administration and its representatives are arguing that we 
should consider other legislative approaches to deal with these 
issues. I was the primary cosponsor of H.R. 412, the Trade 
Fairness Act, which was introduced by Steel Caucus Chairman 
Ralph Regula on January 19, 1999. We would have been more than 
pleased to have had the Administration's support while we were 
advocating this legislation and recruiting cosponsors. The 
language in this bill would make laws which have been on our 
books for years, such as Section 201 of the Trade Act, more 
effective and easier to use. H.R. 412 would make it easier for 
the President to impose duties, impost a tariff-rate quota 
system, or impose quantitative restrictions under section 201 
in a way that is fully consistent with our WTO obligations and 
the WTO ``Safeguards Agreement.''
    This approach is completely ``WTO compliant'' and could 
hardly be colored as sending any sort of protectionist 
signal(s) to our trading partners.
    The Administration was silent on our proposal and declined 
numerous opportunities to support it or work with members from 
both the Republican and Democratic parties to offer 
constructive criticism to strengthen and advance the 
legislation. As recently as February 25, 1999, at a hearing of 
the Ways and Means' Subcommittee on Trade, Ambassador 
Barshefsky (USTR) and Secretary Daley (Commerce) refused to 
endorse trade law changes that their departments today seem to 
be open to, if not outrightly endorsing.
    What has happened to cause this renewed focus by the 
Administration on the steel crisis? We have put together a 
bipartisan coalition of over 200 members of the House of 
Representatives to cosponsor the legislation we have before us 
today, which was introduced by our colleague, Rep. Peter 
Visclosky. The Administration needs to be reminded that, if 
they choose to ignore opportunities to find constructive 
solutions to the problems facing our nation, its workers, and 
communities, they may find their hand forced by Congressional 
action.
    I believe that this is a proper role for Congress to play. 
As the elected representatives of the people, if the Executive 
Branch does not properly respond to a situation when the people 
of this great nation are crying out for some action, the 
Congress must move legislation to address the situation.
    I therefore dissent from the negative recommendation that 
the Committee today places on this report and urge the passage 
of this legislation by the House of Representatives.
                                                      Phil English.

            DISSENTING VIEWS OF REPRESENTATIVE SANDER LEVIN

    The steel surge over the last year has been real and, 
indeed, very harmful.
    More than 10,000 hard-working steel workers have lost their 
livelihood as companies have reduced their workforces, engaged 
in production cuts, and in some cases, declared bankruptcy. The 
U.S. steel industry, efficient as any in the world, could not 
withstand the deluge of low-priced imports of steel flooding 
our markets.
    The prime author of H.R. 975, Pete Visclosky and others, 
have played a critical role in highlighting this crisis and 
spotlighting the injury done to thousands of steel workers and 
the steel industry from the dumping of foreign steel.
    It is clear that the Government did not act soon enough. It 
is also clear that even when government does act aggressively, 
under present law they do not have the tools necessary to 
remedy this situation.

                  present trade law reacts too slowly

    Under present law, petitions to stop the dumping of steel 
were not filed until last September. And, while the 
Administration acted aggressively on these cases--including 
Commerce's effective use of the critical circumstance provision 
of U.S. law--existing U.S. trade remedies do not provide U.S. 
producers and workers with expeditious relief, particularly in 
the face of sudden, dramatic import surges.

           present remedies are incomplete and can be evaded

    Our present response is ad hoc in that relief under the 
antidumping law only covers certain products from specific 
countries, and does nothing to prevent foreign producers from 
shifting to other production areas or producers from other 
countries from stepping in to fill the gap.
    Only section 201 could provide a comprehensive response, 
and the way it is presently structured to require a long period 
of import surges, indeed five years of them, an industry could 
be devastated before meeting present standards for relief.

        present trade law fails to consider fundamental problems

    Our current laws do not address the more fundamental, 
systemic problems of structural overcapacity and anti-
competitive foreign practices that underlie import surges such 
as the one that occurred in 1998.
    These problems brought to the fore by the steel crisis 
require that we reform and strengthen our trade laws. We must 
provide the necessary tools to deal with this crisis and 
prepare for similar situations in the future.
    H.R. 975 is not the right mechanism.
    First, it calls for action in a way that is contrary to the 
rules of the World Trade Organization (WTO) and our obligations 
thereunder. Because of this, John Podesta, the White House 
Chief of Staff has recommended a veto to the President. The 
reason is clear. We cannot seek to use the WTO to enforce 
international rules of law regarding trade--as we currently are 
in many cases--while at the same time advancing a proposal 
which is clearly in violation of those rules.
    I have actively participated over the years in battles to 
improve our trade laws, with some success in the passage of the 
'88 Act and in the maintenance under WTO of the very dumping 
laws invoked in this case. I have fought to broaden the ability 
in negotiating our trade agreements to include vital labor 
market and environmental concerns.
    In each instance it has been to strengthen the rules of 
competition and trade, and to adapt them to the changing nature 
of trade or to oppose them when they failed to do so. It has 
been within a framework built on rules that will govern, not 
ones that can be set aside as a nation sees fit.
    Second, we have an instruction--unprecedented as we can 
determine in this Committee's history--from the Majority 
leadership that opposes the bill, to a Committee Chairman who 
opposes the bill, to report that bill to the Floor. To appear 
consistent with these views, they say it should be reported out 
unfavorably, but from their perspective the political benefit 
would seem the same--to divide House Democrats from the 
Administration which will veto the bill, while at the same time 
giving Republicans in marginal seats a boost by appearing to be 
concerned about steel workers and the steel industry.
    To further the chance that at some point in this proceeding 
we will step back and seize an opportunity to pass needed 
legislation that can become law and have an immediate impact on 
the steel crisis and a long-term on our trade policy, I am 
introducing legislation that would do the following:

          Strenthen section 201 by removing the unduly high 
        causation standard, requiring consideration of the 
        impact of import surges, shortening the time period for 
        obtaining and expanding the availability of provisional 
        relief, and requiring the ITC to perform a more 
        comprehensive injury and threat analysis.
          Create early warning import monitoring systems by 
        creating mechanisms for U.S. industries and workers to 
        request monitoring of specific products, establishing 
        an import monitoring center, providing for the early 
        release of import data when import surges are detected, 
        and implementing a system to allow for the accurate 
        tracking of products subject to antidumping/
        countervailing duty orders or safeguards actions.
          Reaffirm the U.S. antidumping and countervailing duty 
        laws by restoring the Department of Commerce's ability 
        to use petition information where foreign producers or 
        importers refuse to cooperate in an investigation, and 
        restoring the correct injury causation standard.
          Address the systemic problems underlying import 
        surges by requesting the ITC to conduct a section 332 
        investigation on anti-competitive practices in 
        international steel trade, and directing the Office of 
        the U.S. Trade Representative to follow up on the ITC's 
        findings.
          Promote expedient, effective enforcement of U.S. 
        trade laws by providing additional funding to the 
        Department of Commerce, the Office of the U.S. Trade 
        Representative, the International Trade Commission and 
        other agencies to administer, enforce, and defend U.S. 
        trade laws and actions.
          Initiate a section 201 investigation on the impact of 
        increased steel imports on the U.S. industry.

    I am providing each of you a more detailed summary. As a 
result of these provisions, this bill would provide access to 
comprehensive relief to the steel industry now and access to 
relief against future import surges more quickly, more readily, 
and comprehensively.
    I have received word from the Majority that if I introduced 
this bill as an amendment to H.R. 975, it would be ruled out of 
order on grounds of germaneness. While it deals directly with 
the steel crisis, it also applies the reforms to any and all 
import surges and related crises.
    Therefore, I will not offer it today. But I hope it helps 
point the way toward significant remedial action that can 
actually become the law of the land.

                   Import Surge Response Act of 1999

                    outline and purpose of proposal

    Over the last year low-priced imports of steel have flooded 
the U.S. market. Although U.S. steel companies and workers are 
among the most modern, efficient, low-cost producers in the 
world, they have not been able to withstand this deluge. Over 
10,000 hard-working steel workers have lost their livelihood as 
companies have reduced their workforces, engaged in production 
cuts, and in some cases, declared bankruptcy.
    Over the last few weeks, the Administration has taken some 
important steps to address this problem, including aggressively 
enforcing U.S. trade laws. Last month, the Department of 
Commerce preliminarily determined that Japanese, Brazilian and 
Russian producers were dumping hot rolled steel into the United 
States. Commerce also has reached two agreements with Russia to 
curb steel imports into the United States. As a result of these 
steps--including Commerce's effective use of the critical 
circumstances provisions of U.S. law--steel imports into the 
United States have slowed substantially in key product 
categories. However, in other product categories, imports 
remain at historically high levels, and in some instances have 
actually continued to increase.
    The purpose of the Import Surge Response Act is to provide 
a comprehensive, coherent and sustainable response to the 
current import surge and the crisis it has created for workers 
and firms in the U.S. steel industry, and to ensure that future 
import surges are addressed far more quickly and effectively. 
In particular, the bill, together with a proposal that the 
Committee on Ways and Means request the U.S. International 
Trade Commission (ITC) to initiate an investigation under 
section 201, will provide a three-part strategy to address the 
current crisis for workers and firms in the U.S. industry, and 
to provide more effective tools for the United States to 
address future crises.
    First, the bill contains a complete package of amendments 
to section 201 so that it provides a more effective tool to 
address sudden import surges in the steel and other industries 
in this crisis and in the future. Section 201 offers a 
comprehensive mechanism to address the current import surge in 
steel, because a section 201 investigation will be able to 
cover all product categories, rather than just specific product 
sectors as under the antidumping and countervailing duty laws. 
In addition, under section 201 the U.S. industry can receive 
various forms of relief, including tariffs and import quotas. 
These amendments, with the proposal (attached) that the Ways 
and Means Committee request the ITC to conduct an investigation 
of the steel industry under section 201 as amended by this 
bill, provide a swift, effective and pragmatic solution to the 
current crisis and will enable us to address future crises more 
effectively.
    Second, the bill would establish and codify several early 
warning and anticircumvention systems. The early warning 
systems will enable the United States to detect future import 
surges andprevent unnecessary adverse consequences to U.S. 
industry. The anticircumvention provisions will help to ensure that 
relief put into place remains effective and is not undermined by 
evasive actions taken by our trading partners.
    Third, the bill includes provisions to address underlying 
problems in world steel trade--such as cartel arrangements and 
other anticompetitive practices, as well as import licensing 
requirements--that tend to channel excess production capacity 
in foreign industries directly into the U.S. market, while 
other markets remain largely immune to the import surge. The 
existence of these practices has contributed to the devastating 
import surge that has occurred over the past year and has 
magnified its impact on the U.S. market.

                          summary of proposal

Create stronger, more effective safeguard relief

    Section 1 of the bill contains six key amendments to 
strengthen sections 201-204 of the Trade Act of 1974. Sections 
201-204 allow U.S. industries to obtain relief from imports--
including in the form of higher tariffs and import quotas--even 
when unfair trade practices such as dumping are not present. 
The amendments in the bill provide a coherent package of 
changes that will: remove the current, unnecessarily high 
standard for demonstrating a causal link between imports and 
injury to the U.S. industry; restructure section 201 standards 
to ensure that import surges can be addressed more quickly and 
effectively; expand the availability of early and meaningful 
provisional relief; extend application of the captive 
production provision of U.S. antidumping and countervailing 
duty law to section 201; and improve injury analysis by adding 
common sense factors to the injury analysis the ITC is required 
to conduct.
    Remove unduly high causation standard.--Under current law, 
increased imports must be a ``substantial cause of serious 
injury, or threat thereof'' for the ITC to make an affirmative 
determination under section 201. The ``substantial cause'' 
standard establishes a significant and unnecessary obstacle to 
obtaining relief under the statute, because it requires that 
increased imports be ``not less than any other cause'' of 
injury, typically the primary or leading cause of injury. 
Moreover, this standard is higher than that allowed under the 
WTO Agreement on Safeguards, which requires only that increased 
imports ``cause serious injury, or threat thereof.''
    Section 1 of the bill amends the section 201 causation 
standard to comport with the causation standard established in 
the WTO Safeguards Agreement. As amended, U.S. law will require 
that increased imports would have to cause, or threaten to 
cause serious injury for the ITC to issue an affirmative 
determination. Imports will no longer have to be the leading 
cause or most important cause of injury, or even more important 
than any other cause, so long as imports contribute 
significantly to the serious injury.
    To assist the ITC in applying this causation standard, the 
bill directs the ITC to focus its analysis on the rate and 
amount of the increase in imports, the import share of the 
domestic market, and the timing and volume of imports (see 
section on import surges, below).
    Address import surges more quickly and effectively.--A 
substantial shortcoming in existing U.S. law is its failure to 
recognize expressly that import surges occurring in a short 
period of time, such as the import surge that has occurred over 
the last year in steel, can cause or threaten to cause serious 
injury. In particular, the ITC's practice of examining injury, 
typically over a five-year period, has led to the perception 
that injury must ripen or mature over a number of years in 
order to meet the standards in the statute. Section 1 of the 
bill corrects this problem by requiring the ITC to consider in 
its causation analysis the timing and volume of imports, 
specifically including whether there has been a substantial 
increase in imports over a short period of time. The bill makes 
a clear that an import surge is not required in order to 
establish causation--in other words, that there are many 
different circumstances in which the ITC may find that 
causation standard is met, including circumstances that do not 
involve import surges.
    Provide faster provisional relief under section 201--
Section 1 of the bill shortens the time frame for provisional 
relief by almost one-third, from 90 to 65 days. This change 
will enable firms and workers facing critical import surges to 
obtain provisional relief more quickly.
    Improve effectiveness of section 201 by including common-
sense factors for injury determinations.--Section 1 of the bill 
also clarifies the factors that the ITC is required to consider 
in determining whether the U.S. industry is experiencing or is 
threatened with serious injury. With respect to serious injury, 
section 1 of the bill requires the ITC to consider, in addition 
to the factors currently enumerated in the statute, the change 
in the levels of sales, production, productivity, capacity 
utilization, profits and losses, and employment. These indicia, 
which are provided for in the WTO Agreement on Safeguards, 
should assist the ITC in focusing its analysis on current 
industry conditions, in addition to any historical trends in 
the domestic industry that may be relevant.
    Section 1 of the bill also makes the section 201 provisions 
governing threat of serious injury more effective. For example, 
section 1 requires the ITC to consider conditions in foreign 
industries that point to the possibility of further increases 
in exports to the U.S. market. These factors include foreign 
production capacity, foreign inventories, the level of demand 
in third country markets, and the availability foreclosure of 
other export markets. These modifications will ensure that the 
ITC conducts a more comprehensive threat analysis as it 
requires the ITC not only to consider the state of the U.S. 
industry, but also conditions in foreign industries and 
markets.
    The threat standard is particularly important, because it 
can be used to provide relief before workers and firms suffer 
full-blown injury, if the evidence indicates that such injury 
is imminent. Proper and effective use of the threat standard 
can save jobs and avoid injury to firms.
    Expand availability of early, provisional relief.--Existing 
U.S. law authorizes imposition of provisional measures after 90 
days, if circumstances warrant this relief. The bill 
strengthens these provisions in two ways.
    First, the bill directs the ITC to consider whether there 
is or has been an import surge in determining whether 
provisional relief should be provided. By requiring ITC to look 
at import surges, the bill makes clear that import surges can 
be an important indicator that critical circumstances exist, 
and that provisional relief should be provided.
    Second, under current law, the ITC is allowed to make a 
critical circumstances finding and recommend provisional relief 
only if the investigation resulted from a petition by a 
domestic industry. Current law does not allow for the 
possibility of provisional relief in the case of section 201 
investigations begun at the request of USTR, the Committee on 
Ways and Means or the Committee on Finance, or in the case of 
investigations self-initiated by the ITC.
    The current steel import crisis has made clear that 
expeditious provisional measures often are crucial in 
preventing irreparable harm to a domestic industry adversely 
affected by increased imports. As a consequence, section 1 of 
the bill changes U.S. law to allow the President and respective 
Committees to assert critical circumstances, and to request 
provisional relief in situations where they have requested 
initiation of a section 201 investigation.
    Extend application of the captive production provisions of 
U.S. antidumping and countervailing duty laws.--Section 1 also 
would extend to section 201 the ``captive production'' 
provision of U.S. antidumping and countervailing duty law. This 
provision, enacted as part of the Uruguay Round Agreements Act, 
is intended to ensure that the ITC, in conducting an injury 
analysis, does not double-count production by the domestic 
industry in certain circumstances in which upstream and/or 
downstream products are subject to an investigation.

Create improved early warning import monitoring systems

    Amend section 332 of the Tariff Act of 1930 to allow 
private parties to bequest import monitoring.--To promote early 
detection of import surges and other potentially damaging trade 
flows, section 2 of the bill creates a mechanism for domestic 
industries to request import monitoring of particular products. 
Under existing section 332 of the Tariff Act of 1930, the 
President, the House Committee on Ways and Means and the Senate 
Committee on Finance each may request the ITC to monitor and 
investigate imports and conditions of competition between U.S. 
and foreign industries, including the collection of data that 
may be used in making a safeguards determination. Section 2 of 
the bill amends section 332 to establish a statutory procedure 
that would enable domestic industries or representatives of 
domestic industries to request that the President consider 
whether import monitoring is appropriate, and if so, to request 
such monitoring and data collection by the ITC. Under this 
provision of the bill, a request by the President to 
commencemonitoring and data collection would be without prejudice to 
whether an investigation under section 201 would eventually be 
initiated by the ITC.
    Ensure early release of import data.--Current regulations 
of the Office of Management and Budget (OMB) authorize the 
Census Bureau to release preliminary steel import data to the 
public in extraordinary situations, prior to the release of 
overall trade data. To improve monitoring and permit an earlier 
response to potential imports surges, the bill expands and 
codifies this practice for early release of data. Under section 
3 of the bill, OMB may release preliminary trade data whenever 
it detects an import surge in a product category, subject to 
Congressional notification. This provision will improve the 
ability of U.S. workers and firms to detect import surges more 
quickly and take actions to respond to such surges effectively.
    Detect and prevent circumvention I.--Establish import 
monitoring center.--Section 4 of the bill authorizes funding 
for the creation of a new Steel Import Monitoring and 
Enforcement Support Center within the Customs Service. The 
Center will be responsible for monitoring and preventing 
illegal transshipment and other attempts to circumvent U.S. 
antidumping, countervailing, and other trade remedy laws.
    Detect and prevent circumvention II.--Monitor imports of 
products subject to AD/CVD orders and safeguard actions.--The 
statistical trade data currently collected by Customs and 
compiled by the Census Bureau does not allow for precise 
monitoring of products subject to antidumping orders, 
countervailing duty orders, or safeguard actions. Collecting 
relevant statistics on imports of these products will 
facilitate the monitoring of product shifts and other actions 
that circumvent trade remedy restrictions. Therefore, to allow 
easier tracking of products covered by trade cases and to 
detect shifts in imports expeditiously, section 5 of the bill 
directs the ITC to establish a suffix to the Harmonized Tariff 
Schedule for products subject to trade actions, that will be 
used to track imports of these products.
    Maintain steel early warning system.--Ensure continued 
monitoring of steel imports.--Section 5 of the bill directs the 
Commerce Department to continue its current comprehensive steel 
import monitoring program.

Strengthen U.S. antidumping and countervailing duty laws

    Protect commerce department ability to investigate.--Under 
the antidumping provisions of U.S. law, the Department of 
Commerce is authorized to use adverse inferences to determine 
the dumping margin for uncooperative foreign producers or 
importers: i.e., those that fail to respond to a request for 
information. Department practice, consistent with U.S. WTO 
obligations, had been to use information contained in the 
antidumping petition, as corroborated by third-party sources, 
as the basis for drawing adverse inferences. However, a recent 
court decision in Borden Inc., et al v. United States bars that 
practice. Section 5 of the bill amends Title VII of the Tariff 
Act of 1930, torestore the ability of the Commerce Department 
to use petition information as the basis for calculating dumping 
margins for uncooperative parties.
    Restore correct injury causation standard.--A recent 
decision by the Court of Appeals for the Federal Circuit in 
Gerald Metals v. United States,  undermines the long-recognized 
standard under U.S. antidumping and countervailing duty law 
that imports need only be a contributing cause of material 
injury and that the ITC shall not weigh the injury caused by 
unfair imports against other factors in reaching its injury 
determination. Based on the 1979 legislative language, the 
court of International Trade has recognized in several 
opinions, some of which have been affirmed by the CAFC, that 
the Commission is permitted to reach an affirmative 
determination if it finds that subject imports contribute even 
minimally, or in a more than de minimis fashion, to the 
material injury suffered by the domestic industry. Grupo 
Industrial Camesa v. United States, 853 F. Supp. 440, 444 (Ct. 
Int'l Trade 1994), aff'd 85 F. 3d 1577 (Fed. Cir. 1996); U.S. 
Steel Group v. United States, 873 F. Supp. 673, 694 (Ct. Int'l 
Trade 1994), aff'd, 96 F.3d 1352 (fed. Cir. 1996); British 
Steel Corp. v. United States, 593 F. Supp. 959, 971 (1984).
     The CAFC's decision in Gerald Metals directly contradicts 
the well-established legislative intent, as well as judicial 
interpretations and ITC practice following that intent. 
Accordingly, section 5 of the bill clarifies this essential 
injury standard expressly to reject that ruling.

Investigate causes underlying import surges

    Section 7 of the bill directs the ITC to conduct an 
investigation and prepare a report within one year on 
anticompetitive activities in international steel trade. In 
particular, section 7 of the bill directs the ITC to 
investigate the extent of cartelization and other 
anticompetitive practices in international steel trade pursuant 
to its authority under section 332 of the Tariff Act of 1930. 
This investigation will require gathering of empirical 
information in other countries and from U.S. and foreign 
industry sources, drawing on U.S. embassies, the Foreign 
Commercial Service, local U.S. Chamber of Commerce and other 
business groups, other executive branch agencies with relevant 
information, and such other public and private fact-finding 
resources as may be available. The ITC will be directed to use 
its full authority, including under section 333, to collect and 
provide as much detail as possible about the anticompetitive 
practices themselves and on their trade effects, including: 
foreclosure of U.S. and third country exports; dumping in the 
U.S. and third markets; trade diversion into the U.S. market; 
and the contribution of anticompetitive practices to the 
problem of overcapacity. The provision will make clear that 
this will be an empirical investigation, not a theoretical 
exercise. While analysis of trade data will be necessary, the 
use of economic modeling techniques is not expected to play a 
role in this investigation. Section 7 further directs the ITC 
to provide its report to the USTR, and the Committees on Ways 
and Means and Finance, and directs USTR to include the 
Commission's findings in its National Trade Estimates report 
and to propose there or in a separate report to the Committees, 
steps to be taken to address any anticompetitive practices in 
international steel trade. In addition, the bill provides that 
USTR in the National Trade Estimates report identify import 
licensing systems of foreign countries in the steel sectorand 
evaluate the consistency of those systems with WTO or other 
international trade obligations of those countries.

Authorizations to support enhanced enforcement and monitoring

    The Bill authorizes additional funding for enhanced import 
monitoring and enforcement of U.S. trade laws.
    Provide for import monitoring and expeditious relief.--
Section 8 of the bill provides additional funding for the 
Commerce Department to implement more comprehensive import 
monitoring programs and to provide for stronger, more 
expeditious enforcement of the antidumping and countervailing 
duty laws. The increased funding will ensure more effective 
import monitoring and should shorten the time required to 
conduct and complete antidumping and countervailing duty 
investigations. Additional funding is also authorized for the 
ITC to allow for more expeditious determinations.
    Assist domestic industries and U.S. workers seeking relief 
under the trade laws.--Section 8 authorizes funding for the 
Economic Development Administration to create a Federal Trade 
Law assistance fund. The Fund will provide grants to small and 
medium size businesses, and U.S. workers, for the preparation, 
filing and prosecution of trade remedy cases.
    Maintain the integrity of U.S. trade remedies.--Section 8 
of the bill authorizes additional funding to the Office of the 
U.S. Trade Representative to hire additional staff to defend 
U.S. antidumping, countervailing duty and safeguards actions, 
and challenge antidumping, countervailing duty and safeguard 
actions by U.S. trading partners that are inconsistent with 
their WTO obligations.

Ways and Means Committee request for section 201 investigation

    In addition to the measures described above, the proposal 
would include a resolution by the Committee on Ways and Means 
directing the ITC to commence a comprehensive section 201 
investigation of the impact of increased imports on the steel 
industry, applying the standards set forth in the bill. 
Commencing a section 201 investigation would provide an 
opportunity for the industry to obtain a comprehensive response 
to the import surge that has harmed so many U.S. workers and 
firms.

Additional programs

    The proposals outlined above are designed to provide a 
comprehensive response to the current import surge in the steel 
sector and to create stronger, more effective tools to detect 
and prevent, and, if necessary, respond more quickly and 
effective to future import surges--all by taking full advantage 
of, but not taking actions that are inconsistent with, the 
international obligations of the United States. The purposes of 
this package is to strengthen U.S. trade policy and 
administrative instruments that can be used by U.S. workers and 
firms. Additional proposals that improve the effectiveness of 
U.S. trade laws may be considered. In addition, further 
proposals to address directly the immediate needs of workers 
and firms in the interval until trade remedies take effect may 
also be considered.

                                                      Sander Levin.

         DISSENTING VIEWS OF REPRESENTATIVE MICHAEL R. McNULTY

    Mr. Chairman, I am a co-sponsor and strong supporter of 
Rep. Visclosky's bill, HR 975. This Congress must send a strong 
message that we will not tolerate the continued dumping of 
steel--dumping that is causing tremendous harm to the industry 
and forcing huge lay-offs of hard-working U.S. steel workers.
    As I mentioned during the Trade Subcommittee hearing on 
this issue, over 10,000 steel workers have been laid off in the 
past year as a result of this flood of under-priced steel 
coming into the United States.
    America was built on the backs of laborers. We cannot turn 
our backs on them now.
    HR 975 is clear and straightforward. It would reduce steel 
imports to 25% of the U.S. market. That is the level that 
prevailed in July 1997--before the dumping began. The bill 
authorizes the U.S. Customs Service to refuse entry to any 
steel products that exceed the allowable levels. The bill also 
creates a steel import notification and monitoring system. This 
system would require any person importing steel products to 
obtain an import notification certificate before those products 
can enter the U.S.
    American steel companies and organized labor have worked 
very hard over the last decade to restructure and to restore 
the integrity of this important industry. We cannot allow these 
sacrifices to be in vain.
    I urge this Committee to favorably report this bill to the 
floor of the House of Representatives.

                                                Michael R. McNulty.

                                

```