*EPF311 04/24/2002
House Committee Votes Down a Resolution to Change Steel Remedy
(Refuses to replace it with USITC measures) (540)

By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- The House of Representatives' main trade committee has voted to uphold temporary tariffs on steel imports imposed by President Bush.

The House Ways and Means Committee rejected April 24 by voice vote a resolution to disapprove the President's March 5 decision imposing temporary tariffs of up to 30 percent on imported steel under Section 201 of U.S. trade law.

The resolution, introduced by William Jefferson, Democrat from Louisiana, aimed to replace Bush's remedy with less restrictive measures recommended by three of the six commissioners of the U.S. International Trade Commission (USITC). Rejecting the president's action and adopting the USITC measures would lower new tariffs by one third.

Under Section 203 of U.S. trade law Congress may enact a joint resolution within 90 days to disapprove a remedy ordered by the president and enact the USITC's remedy instead.

Jefferson said that the port and shipping businesses in his home state had already been hurt by the tariffs and called the President's decision "indefensible, politically driven and WTO [World Trade Organization] inconsistent." He said that it "has damaged relations with our key trading partners, increased taxes on consumers and threatened hundreds of thousands of jobs across the country."

"I do not believe that it is in our national economic interest," Jefferson said.

But other committee members rejected these arguments and defended Bush's action. Phil English, Republican from Pennsylvania, said that anything less than the relief offered by Bush would be unacceptable.

"Passage of this resolution would send a message to the world that it is open season on the American manufacturing base," he said.

Committee Chairman Bill Thomas, Republican from California, told panel members that they were not determining whether they agree or disagree with the president's action but rather whether they prefer the USITC's remedy.

"I don't believe that the ITC's remedy recommendations are more favorable, and, in some instances, the ITC's remedy is actually worse," he said.

The safeguard approved by the president includes tariffs that are in some cases higher and in other cases lower than those recommended by USITC commissioners. But it also provides exclusions for U.S. free trade partners, developing countries and West Coast steel producers who depend on imported steel.

Major steel-producing countries have criticized Bush's decision as a protectionist measure and vowed to file a complaint with the WTO. Moreover, the European Union (EU) and Japan have threatened to retaliate against U.S. goods if they are not compensated for business losses resulting from the tariffs.

Thomas, however, said that in contrast to Bush's action, the EU decision to introduce its own safeguard protection for the European steel industry was not preceded by a thorough investigation.

He said he was "deeply troubled" by the EU's intention to retaliate against the United States before a World Trade Organization ruling on the steel dispute.

"I hope that reason will prevail and the EU will not take such unilateral action," he said.

The vote means that the resolution will be considered by the full House with the committee's recommendation that it be defeated. No similar resolution has been introduced in the Senate.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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