For executives in the North American steel industry, it will be dj vu all over again. When the 32-member American Iron and Steel Institute (AISI) holds its annual meeting in Washington, D.C., this month, leaders will undoubtedly be discussing trade, trade and more trade.
The group of integrated and electric arc furnace producers will be meeting in conjunction with the Steel Manufacturing Association on May 17-19. The meeting will likely be cheerier than in the past few years as the industry is in comparatively great shape. In January, for instance, Pittsburgh-based U.S. Steel reported profits of nearly $1.09 billion for 2004 on revenues and other income of $14.1 billion. In 2003, the company took in $9.5 billion and lost $463 million. As of the end of last year, the venerable manufacturer had more than $1 billion in cash, a major improvement from $316 million in December 2003. Additionally, AISI reported in February that steel shipments from U.S. steelmakers improved 5.8% in 2004 over 2003.
Written Statement Of
John P. Surma
President And CEO
United States Steel Corporation
And Chairman, American Iron And Steel Institute
Before The Congressional Steel Caucus
March 16, 2005
(102 KB, .pdf format)
Still, the industry could hardly be described as content.
"Every signal we are getting -- both publicly and privately -- is that there is significant danger the United States will agree, or be forced to agree, to substantial trade law weakening as part of its efforts to advance the Doha Round talks," said John Surma, U.S. Steel president and CEO, in testimony to the Congressional Steel Caucus on March 16.
Surma, who also serves as AISI chairman, singled out China, Japan, Korea, Brazil and "others" as "perennial unfair traders," whose top objective at the World Trade Organization talks is "gutting the antidumping and countervailing duty laws.
"These countries are well organized and very far along in shaping an agenda that would inevitably lead to a calamitous weakening of fair trade disciplines," Surma said. "Meanwhile, the U.S. government has been slow out of the box and timid in its response to these efforts."
Surma encouraged the caucus to support not weakening any trade laws.
It's not the first time the industry has turned to politicians to help protect its markets. Most recently, President Bush had declared tariffs against some foreign steel in 2002 in response to steel executives traveling to Washington, D.C., to complain about dumping -- the practice of selling imported steel in the U.S. below its cost of production. Some overseas producers are able to do this because their governments subsidize their operations.
Known as the "Section 201" tariffs, the fees did help to prompt a rebound of domestic steel but not without angering steel-consuming companies that complained of shortages and escalating prices. While Bush eventually rescinded his order, steel prices have been buoyed by increased demand globally.
Nonetheless, Big Steel, one of the most vocal sectors of manufacturing when it comes to trade rules, shows no sign of weakening its plea.
"The fact is that American manufacturers do not get a fair shake when it comes to international trade," Surma told the politicians. "We are not competing on a level playing field."