- The Washington Times - Sunday, December 10, 2006

We live in an increasingly competitive world where manufactured products for the U.S. market come from all corners of the earth. While we often hear complaints about unfairness abroad, much of the encouragement for taking manufacturing offshore can be found right here in Washington. The debate on how to save manufacturing should start by examining what the government should not be doing: protecting industries when they do not need protection.

Our associations represent over 1,000 companies, many of them small, that make automotive parts and employ almost a million Americans. These companies compete in the global marketplace every day, making decisions that impact their employees and their future viability. Unfortunately, one major concern these days is that our own government is getting in the way of keeping auto-parts jobs in the United States.

Such is the case with the antidumping and countervailing-duty laws. These laws, intended to remove “unfairness” from the U.S. market, should not be used to protect companies that do not need protection. The current case on corrosion-resistant steel, which is used extensively in the production of automobiles and auto parts, is a good example. The International Trade Commission (ITC) will decide on Dec. 14 whether to remove these duties, which have been in place since 1993, or to keep them for another five years. If the duties are retained, it will accelerate the loss of American jobs in the auto-parts industry.

Manufacturers need a steady supply of raw materials to produce our products. Our companies take steel and other raw materials and produce the components in automobiles that Americans depend on daily. The government’s restrictions on steel imports provide protection for the steel industry. Yet that protection has limited our companies’ ability to obtain the steel necessary to manufacture in the United States, and ultimately will destroy tens of thousands of U.S. jobs.

As the government agency that decides whether or not to continue these trade restrictions, ITC decisions can have a profound impact on the continued viability of our manufacturing sector.

Duties can shut off trade, denying U.S. manufacturers access to competitively priced raw materials. We do not favor imports that materially injure our industries, but restriction of imports should not hurt others. The ITC should look at whether keeping duties in place would do more harm than good.

The bottom line is that the steel industry, which has been protected by these duties for more than a decade, does not need them any more. The theory of U.S. dumping law is that duty orders should be lifted once the protection is no longer needed. The facts clearly show that this is the case for corrosion-resistant steel.

Our customers, the six largest auto manufacturers in the United States, have joined together publicly for the first time to urge the ITC to revoke the duties. While the auto industry uses about half the corrosion-resistant steel consumed in the United States, auto parts and a variety of other manufacturers use the rest. Collectively, companies that use steel in manufacturing employ over six million workers, 60 times the employment of the steel industry.

Steel costs usually account for a high percentage of the total cost of our members’ products. While larger companies may be able to adapt to higher raw-material prices or pass on these prices to their customers, our members simply cannot. Three major automotive suppliers have filed for bankruptcy in the last three years, citing escalating steel prices as a major reason for their bankruptcies.

Metalformers are threatened with a similar fate, and many have already gone into bankruptcy or closed altogether. All auto suppliers, and, for that matter, metalforming companies that supply other markets where corrosion-resistant steel is used — including construction, telecommunications, industrial/consumer hardware, defense products, the trucking industry and others — are threatened with a similar fate.

We have voiced our concerns to the ITC because we cannot stand by and watch the actions of our own government threaten to make an already bad situation intolerable for American manufacturers. The United States has a healthy steel industry. It will be hard to maintain that health if steel consumers are driven out of business and production of their products is moved off-shore. Needless tariffs on our steel inputs are just what we don’t need.

William E. Gaskin is President of the Precision Metalforming Association. Robert McKenna is President and CEO of the Motor & Equipment Manufacturers Association.

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