Precision Metalforming Association (PMA) member Wes Smith testified on behalf of the Consuming Industries Trade Action Coalition (CITAC) Steel Task Force recently before the House Small Business Committee, calling on Congress to enact trade law reform in order to protect U.S. downstream industries who are being damaged by trade laws intended to protect an industry at the expense of the wider economy.
The Congressional hearing, “Trade Fairness Hearing: How We Can Make Our Trade Laws Work for America’s Small Business,” brought witnesses from a number of different industries, including those representing steel manufacturers.
In his testimony, Smith, President of Plymouth, Michigan-based E&E Manufacturing, a manufacturer of heavy gauged stamped metal fasteners, progressive die metal stampings, and high value added assemblies, stated “All too often ... trade remedies intended to provide protection for one industry cause damage to other industries, particularly so-called ‘downstream’ industries. This is because our trade laws do not require and in some cases, do not permit the Department of Commerce and the U.S. International Trade Commission to consider the total effects of trade policy decision on the overall economy.’”
He continued, saying, “A ‘level playing field’ is like a coin with two sides: it means protection from unfair trade practices by offshore competitors, but it also means protection from unintended consequences of U.S. policy.”
Smith offered four suggestions for changing US trade law, including:
o Requiring an analysis of the total impact of any decision on the overall economy, including downstream impacts;
o Giving equal standing to industrial consumers of a product with domestic producers and importers in trade cases;
o Not subjecting products that are not made in the U.S. or that are in short supply to trade remedies; and
o Adding an expeditious review mechanism for affected industries in trade laws to provide a timely remedy against unintended consequences of the remedies.
PMA President William E. Gaskin submitted testimony to the Committee supporting Smith’s remarks, emphasizing the damage that trade laws can cause to small and medium-sized businesses in the US and calling for suspending dumping duties during changed market conditions, lowering trade barriers, such as lifting Chinese export controls, and updating US trade laws to reflect the global economic environment, including eliminating the Byrd Amendment.
“We cannot believe that Congress or the Administration knowingly tolerates such unintended consequences of US trade policy, which harms one segment of domestic industry, particularly small and medium-sized businesses, while helping another,” wrote Gaskin. He noted that PMA’s May 2004 steel survey found that 97% of metalforming companies reported disruption in their businesses due to the current steel market, with nearly 50% experiencing suppliers canceling orders.
He added, “In the current situation, steel consumers simply cannot compete when market conditions change but trade remedies are inflexible. Trade laws must be more sensitive to domestic customers needs, so where dumping and countervailing duties are no longer needed to prevent or remedy material injury, they can be suspended until market conditions change again and they are needed.”
The Precision Metalforming Association (PMA) is the full-service trade association representing the $41 billion metalforming industry of North America—the industry that creates precision metal products using stamping, fabricating and other value-added processes. Its nearly 1,200 member companies include metal stampers, fabricators, spinners, slide formers and roll formers as well as suppliers of equipment, materials and services to the industry. Members are located in 30 countries, with the majority found in North America—in 41 states of the United States in addition to Canada and Mexico.