*EPF407 07/27/00
Text: Commerce's Mineta on Global Steel Trade Issues
(Report outlines structural problems, solutions) (1170)

U.S. Commerce Secretary Norman Mineta says the United States -- to prevent a future steel import crisis -- will engage key steel-producing foreign governments, especially Japan, Korea, Russia and Brazil, on market-distorting practices in their steel industries.

"We must take steps to address the root causes of instability in global steel markets," Mineta said July 26 during a briefing on the release of a report to President Clinton on "Global Steel Trade: Structural Problems and Future Solutions."

Mineta, who took office July 21 succeeding William Daley, said U.S. efforts to ward off a steel import crisis are consistent with the World Trade Organization (WTO) trading rules and are designed to prevent a repeat of the steel import crisis the United States faced in 1998-99.

In addition, Mineta outlined five other components in the six-point plan being sent to the president. "First, we will provide early warning of import surges and of changes in industry conditions," he said.

The United States government will provide faster relief for the domestic steel industry when import surges occur, he said, and establish an interagency team to provide a coordinated response and funding for U.S. communities experiencing economic distress.

Additionally, the United States will seek a moratorium on Multilateral Development Bank lending practices that add to worldwide steel overcapacity and will seek to boost the agenda of the Organization for Economic Cooperation and Development (OECD) Steel Committee for market reforms.

Following is the text of Mineta's remarks as prepared for delivery:

(begin text)

Remarks by Secretary of Commerce Norman Y. Mineta

Releasing the Report To The President on Global Steel Trade: Structural Problems and Future Solutions

July 26, 2000
Washington, DC
[As Prepared For Delivery]

Thank you, Gene.

I have been Commerce Secretary for only three days. And I am no expert on the global steel industry. But I spent over 20 years in Congress representing a district that is keenly affected by technology and globalization. I remember clearly the semiconductor crisis a decade ago. I was personally involved in the trade issues we had with some of our Asian trading partners. Trade agreements and our trade laws helped our industry get back on its feet and our workers to keep their jobs.

As I learned then, and as the financial crisis of 1997 and 1998 demonstrated, an economic shock in one country can be felt on the factory floors half a world away. You have company managers and workers on those factory floors. And both are equally affected by trade. So we must take positive action on behalf of our industries and our workers, or risk losing the good that we all know can come from globalization.

When you combine sudden economic shocks with the structural problems and market-distorting practices of some of our trading partners, you can end up with a crisis here at home. This is what we saw happen to the steel industry in 1998. And the effects of the crisis are still being felt today.

No one can erase the hardships that American steel workers and industries have endured for the past two years. We have seen plant closings and thousands of layoffs. Whole communities have been hurt. And the impact on families has been devastating.

Our nation has benefited enormously from having the most open market in the world. But we cannot stand by while American workers bear the brunt of market-distorting practices and closed markets abroad.

President Clinton and Vice President Gore recognized this when they put the Steel Action Plan into effect last summer. My predecessor, Secretary Daley, recognized this when he took such quick action to enforce the trade laws and combat import surges. And as the new Secretary of Commerce, I will continue this Administration's strong efforts on behalf of American workers.

The report we are releasing today takes a close look at the market-distorting practices of our major steel-trading partners. It is these practices that have led to so much overcapacity in the global steel industry and unfairly priced imports in the United States. Bob LaRussa will discuss the major findings and our plan for dealing with these long-term problems.

I want to focus on the future. I will put in place a mechanism to deter a future import crisis. And I will work to eliminate the structural problems and market distortions abroad that have caused so much hardship to American steelworkers.

Let me outline our six-point plan. The greatest lesson that we learned from the recent steel crisis is the need for early warnings and quick responses. Our trade laws are very effective, but in this fast-paced global economy, they can take too long to have an effect.

So first, we will provide early warning of import surges and of changes in industry conditions. We will watch key data on the health of the industry as well as import data. Commerce will webcast this information to steel workers and producers so they have the earliest possible warning of conditions in their industry.

Second, we will provide faster relief for industries, workers, and communities when import surges occur. In times of crisis, we will expedite antidumping investigations so that American workers and companies can obtain relief from unfair trade as fast as possible. We have already put in place a new policy to counteract continued import surges after dumping investigations have begun.

Third, we will establish an interagency team to provide a coordinated response and recovery funds for communities experiencing economic distress. The Community Economic Adjustment Office will be seated in the Commerce Department. The Administration has already requested funds to set up this new office.

Fourth, we will vigorously engage foreign governments of key steel-producing countries -- namely, Japan, Korea, Russia, and Brazil -- on market-distorting practices in their steel industries. We must take steps to address the root causes of instability in global steel markets.

Fifth, we will seek a moratorium on Multilateral Development Bank lending practices that add to global overcapacity in the steel industry. Multilateral institutions should promote economic stability and development abroad, not contribute to overcapacity that ends up hurting American industries and workers.

Finally, we will seek to reinvigorate the agenda of the OECD [Organization for Economic Cooperation and Development] Steel Committee by addressing some of the structural issues we have identified in our report. This includes market reforms of the steel industries in Russia and Ukraine. And eliminating formal and informal import barriers to steel around the world.

Conclusion

Our strategy is constructive and forward-leaning.

It is entirely consistent with the WTO [World Trade Organization].

It promotes the benefits of open markets and fair competition. And it gets at the core, long-term issues that have plagued the steel industry for decades and caused distress to our working communities.

(end text)

(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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