Letter to Irving A. Williamson, U.S. International Trade Commission Chairman - Steel Trade

Letter

Congressman Tim Murphy (PA-18), Chairman of the Congressional Steel Caucus, today said he was encouraged the International Trade Commission (ITC) voted to continue an investigation into illegally dumped illegally dumped and subsidized steel used in oil and natural gas production. On Friday morning, the ITC voted 6-0 to move forward with a "full and comprehensive investigation" of the unfair trade practices.

Last week, Chairman Murphy and Vice Chairman Peter J. Visclosky (D-IN) sent a letter to the U.S. International Trade Commission (ITC) urging an investigation. The Steel Caucus letter supports efforts to stop South Korea, India, and seven other countries from dumping unfairly traded "oil country tubular goods" (OCTG) onto the US market.

A surge in US oil and natural gas production has sparked increased demand for steel pipe. This has led to a flood of cheap imports from countries such as Korea, Vietnam, Saudi Arabia, and others that subsidize their export industries in violation of World Trade Organization rules. Imports of oil country tubular goods from the nine countries named by the Steel Caucus totaled nearly $1.8 billion in 2012, more than double their total in 2010, according to a Reuters report.

The trade case is similar to a recent one involving OCTG imports from China. In 2009, domestic pipe and tube steelmakers were shutting down because of a glut of unfairly traded imports. The Steel Caucus successfully worked with the ITC to impose antidumping and countervailing duties on Chinese-made OCTG in 2010, helping the domestic industry to rebound. Since 2010, however, the import surge has shifted from China to other nations that keep their export prices artificially low through illegal subsidies and trade practices.

The Steel Caucus asks the ITC apply the same kinds of duties to seamless and welded steel tubular energy drilling products from India, Korea, Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine, and Vietnam. The ITC is an independent agency responsible for enforcing trade laws and agreements. A full ITC hearing on this OCTG case will likely be scheduled for the fall where Steel Caucus leadership will testify.

"We cannot sit by while other nations take advantage of our laws and illegally dump their goods here, costing us jobs and undermining our economy. The ITC must act to uphold our country's trade laws, and in doing so, give Western Pennsylvania's steel industry the opportunity to compete fairly in the U.S. and global marketplace," said Steel Caucus Chairman Tim Murphy (R-PA).

"American steelworkers and domestic manufacturers have the skills and precision to compete with any foreign steel producers. Throughout our region and around our country, we produce quality Oil Country Tubular Goods (OCTG) and we must ensure that inferior subsidized steel from other nations is not illegally dumped in the U.S. This is a vital concern for our nation's steel producers, workers, and our nation's public safety. Furthermore, the ITC must ensure that these inferior subsidized OCTG products, from countries that willfully violate our nation's trade agreements, are not tolerated," said Steel Caucus Vice Chairman Peter J. Visclosky (D-IN).

For a complete list of signers, please click here. The full text of the letter is as follows:

Dear Chairman Williamson:

We are writing to express our support for our constituents in the domestic steel industry as it pertains to the ongoing investigation of unfairly-traded imports from countries in the above-referenced case filed on July 2, 2013.

The U.S. OCTG industry represents a critical segment in our nation's steel sector. The domestic industry makes highly advanced and valuable products that serve an array of customers in the energy sector. The health of the domestic industry is essential to the country's ability to secure energy independence and take full advantage of the economic opportunity posed by development of offshore and vast new shale play areas. OCTG manufacturers are also important customers of the nation's steel industry, acquiring the flat-rolled and billet products necessary to make OCTG finished goods.

While this segment of the steel industry has fought back to recover from the Great Recession, the growth in development of the Marcellus Shale, Barnett Shale, and other oil and gas fields was looked at as a promising opportunity for manufacturers. Instead, the industry has faced a continued onslaught of unfairly-traded and illegally subsidized imports from the above-named countries.

Imports of OCTG from the subject countries increased from 840,000 net tons in 2010 to more than 1,770,000 net tons in 2012. The rise in imports has continued into 2013 and, as a result, the domestic industry has experienced lost sales and a deterioration of its financial position -- even in a period of historically strong demand. Import data show that prices for subject products have been consistently and dramatically undersold in the market; the petitions in these proceedings allege dumping margins that typically exceed 30 percent, and in most cases are far higher.

Unfairly-traded imports cannot take sales and jobs away from American workers and employers. It is particularly troubling in the context of an industry that has seen repeated surges of unfair trade in recent years. At a time when manufacturing and employment is still depressed, it is vital that the Commission take action to ensure American producers can compete on a level playing field.

The Commission must fully and effectively enforce our trade laws, and ensure that foreign producers refusing to play by the rules are not permitted to injure American workers and companies. Therefore, we urge you to make an affirmative preliminary determination in this proceeding and allow a full and comprehensive investigation of the allegations in the petitions.