- The Washington Times - Monday, January 27, 2003

With the possibility of military action against Iraq imminent and the threat of more terrorist attacks on American soil, concern about the nation's military preparedness is at a high pitch.
Until the tragic events of September 11th, we had planned for national-defense needs largely in terms of the resources needed to support conflicts on foreign soil all of our conflicts since the Civil War have been on foreign soil. Now, we must face the possibility that we may need to replace significant portions of our domestic infrastructure while producing war materials.
Consequently, the need to have ready access to domestic sources of steel is more important than ever.
A healthy domestic steel industry is a cornerstone for our national defense. Steel is a fundamental component of many weapons and weapons systems, as well as the ships, tanks and other vehicles that carry these systems. An October 1997 report of the President's Commission on Critical Infrastructure Protection identified a number of critical infrastructures for which steel is also vital, including: electrical power plants, hundreds of thousands of bridges, four million miles of highways and roads, and 1.5 million miles of oil and gas pipelines. Repairing or replacing this infrastructure would place heavy demands on our steel supply.
I believe it would be an unconscionable national-security risk to allow ourselves to become significantly dependent on foreign steel sources. Even if we assume that other countries would be able and willing to set aside their own national priorities to serve ours, there could be uncontrollable delays in delivery, especially in a time of war. Seeking to preserve the health of our domestic steel industry would seem like a no-brainer. But unless we are careful, we could see this strategic industry move offshore.
Over a five-year period beginning in 1997, the U.S. steel industry was under attack by a surge of foreign imports being dumped illegally on U.S. shores. As a result, U.S. steel prices plunged to record lows. Steelmakers were losing as much as $50 a ton for every ton of steel produced.
It doesn't take a Ph.D. economist to grasp the impact on the steel industry. Since 1997, 35 domestic steel companies were forced into bankruptcy and more than 52,000 iron and steelworkers lost their jobs. This injurious flood of imports was the result of foreign countries producing far too much steel and much of it the result of government subsidies and market protections that have kept internal steel production artificially high while blocking imports.
Large foreign markets, such as Japan, China, Brazil and India, are effectively closed to imported steel. So, when foreign steelmakers need to unload their excess production, they turn to the U.S., with the most open market in the industrialized world. Through a painful restructuring, the U.S. steel industry made itself over the past 20 years into one of the most productive in the world, investing more than $60 billion to modernize facilities, closing 450 outdated plants and cutting more than 300,000 jobs. U.S. steelmakers are among the lowest- cost suppliers to the U.S. market, but the unchecked tidal waves of subsidized, below-cost foreign steel has threatened to reduce our steel industry to a mere shell.
Last year, President Bush with broad support from Congress initiated a Section 201 investigation of the steel trade crisis. He asked the International Trade Commission (ITC), an independent bipartisan panel, to thoroughly review all aspects of the situation. After a seven-month analysis, the ITC issued a unanimous ruling that the domestic steel industry had suffered injury at the hands of these foreign producers.
Based on their recommendations, the President launched his steel program in March. In all states where steel is such a vital industry, the support for this initiative has been overwhelming. But foreign steel exporters and some steel-using industries have been critical, asking that special exclusions be granted to sidestep the steel tariffs. They also are urging the President to drop the tariff remedy altogether.
At a time when ready access to domestic steel is more crucial than ever, nothing could be more ill- advised. The critical importance of the relief afforded by the steel tariff program has been magnified by the recent reminders that, though our nation is strong, we are not invulnerable. We must ensure that the steel industry will be able to respond to potential defense requirements under a wide range of conditions.
Keeping the steel tariff program effective by not granting any additional exclusions (already, over 765 have been granted, reducing the effectiveness of the relief), will allow the industry to restructure and take the steps necessary to remain a strong and vital contributor to our nation's defense. Lessening or removing the program altogether would have serious repercussions on our national security.

Rep. John Murtha, a Pennsylvania Democrat, is ranking member of the Appropriations Subcommittee on Defense and a member of the House Democratic Task Force on Homeland Security.


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