- The Washington Times - Monday, December 11, 2006

Steel industry executives yesterday pushed for keeping 13-year-old duties on corrosion-resistant steel, which were imposed to head off unfair foreign competition.

The International Trade Commission (ITC) is scheduled to vote Thursday on whether to keep the duties.

U.S. automobile manufacturers, a major user of the steel, have asked the ITC to end the duties because they say the U.S. steel industry, which went through several years of bankruptcy and consolidation, has recovered and no longer needs the measures’ protection and because they say they want a more flexible source of supply.

The steel industry executives contest the auto industry claims.

“What’s really going on here is that they are fighting for the right to buy unfairly traded steel,” Robert E. Lighthizer, a lawyer with Skadden, Arps, Slate, Meagher & Flom LLP, told The Washington Times yesterday.

Steel executives say the industry’s health is irrelevant — although profits on corrosion-resistant steel are low — because the duties are aimed at preventing foreign producers from selling steel in the U.S. market at unfairly low prices, called “dumping.”

They also say dumping is likely to resume if the duties are lifted.

Arguing that the duties should end because the steel industry is healthy is like “saying that because banks are healthy today, we ought to decriminalize bank robbery,” said Alan McCoy, vice president for government and public relations at AK Steel in Middletown, Ohio.

The question, according to Terrence D. Straub, senior vice president for public policy and government affairs at U.S. Steel Corp., is “whether or not there has been violation of our law” in the unfair trade areas, “and if so, to what extent, and, in this case, is it likely to reoccur” if the duties are lifted.

Foreign producers “have a lot of excess capacity, and they will ship here because this is an attractive market,” said Mr. Lighthizer, whose firm represents U.S. Steel, which is the largest integrated steel producer in the United States.

U.S. producers are vulnerable to unfair imports because of high raw-material costs and low profits, he said, adding that lifting the duties would affect the price of corrosion-resistant steel and the amount of imports.

If the duties are ended, “it is our view that auto companies and others will try to buy dumped, unfairly traded steel, there’ll be an increase in the volume of imports, and prices will go down, probably towards the point where we’re hurting again,” Mr. Lighthizer said.

Profits for corrosion-resistant steel have been low and could be further hurt if the duties are lifted, according to James C. Hecht, another lawyer with Skadden.

From 2000 through the first half of this year, the industry had an operating profit of 2.9 percent, Mr. Hecht said.

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