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Steel Tariffs Debate Splits NAM Members

By Tonya Vinas An unusual and controversial policy statement from a committee of the National Association of Manufacturers (NAM) has angered some steel-producing NAM members. Washington, D.C.-based NAM, which has 14,000 members, traditionally does not take stands on sector-specific trade issues. However, at a Dec. 11 meeting, NAM's International Economic Policy Committee (IEPC) voted to recommend that the International Trade Commission "gather evidence on the impact of the Section 201 steel tariffs on both steel-producing and steel-consuming industries" and report its findings by July 31, 2003. The controversial tariffs, which President Bush imposed in early March, came in response to some U.S. steel producers' complaints that foreign competitors were dumping steel in the U.S. market. Some steel consumers -- manufacturers in a variety of industries that use steel in their products -- have in turn complained the tariffs have resulted in steel shortages, lowered quality and unacceptably high price increases for them. The debate between consumers and producers has caused bitter rifts among manufacturers, and that split appears to have hit the NAM. "Today's vote shows exactly why the NAM should never get involved in sectoral trade issues and in litigation issues in which its members are deeply divided," said Andrew G. Sharkey III, president and CEO of the American Iron and Steel Institute (AISI), in a statement issued after the NAM committee's action. Sharkey, whose group includes large, integrated steel producers, called the policy statement the result of a "minority of NAM members . . . dedicated to pursuing its own narrow agenda, regardless of the divisive and damaging impacts on the NAM." Frank Vargo, vice president, International Economic Affairs for NAM, says that the policy statement is the result of "lively debate" among interested parties meeting as a sub-committee in November and again at Wednesday's IEPC meeting. The members' discussion of the issue began after an October vote by the NAM board calling for the IEPC to "develop a policy position on steel trade that is appropriate for all [NAM] constituents." Vargo says at the Dec. 11 meeting, steel-consuming members complained about steel prices climbing as much as 70% and their inability to pass such increases on to customers. Vargo says steel producers pointed out that the tariffs, as high as 30%, could alone not produce such high increases. "The more it materialized, the more it became clear that this was a pricing problem" related to imports and other factors, Vargo says. "It became apparent that all of manufacturing is in trouble." This led the NAM committee to issue two policy statements, the one regarding Section 201 tariffs and another asking President Bush to appoint a "cross-disciplinary panel of experts to analyze competitiveness challenges faced by all manufacturers and recommend a plan of action." Specifically, the panel should review the strong U.S. dollar, tax policy, regulatory law and trade law enforcement, among other things, the committee stated. Vargo says the two policy statements will be reviewed by the full NAM board at its semi-annual February meeting. Only if adopted by the full board will they become official NAM policy.

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