Washington, D.C. –Today, Senator Rob Portman (R-Ohio) testified in front of United States Trade Ambassador Michael Froman and officials from the Commerce, Treasury, Labor, Homeland Security and State Departments at the U.S. International Trade Commission during a hearing on the global steel industry situation and policy recommendations to strengthen U.S. manufacturers. Portman detailed how a level playing field is necessary to protect Ohio workers from unfair foreign competition.

Portman’s top priority in the Senate has been boosting Ohio jobs and the economy. Through his legislation such as the Leveling the Playing Field Act and the ENFORCE Act, Portman has led the fight against countries who break the rules in order to ensure Ohio workers can get a fair shake. Portman and Senator Sherrod Brown (D-Ohio) recently wrote a letter to U.S. Secretary Pritzker urging full implementation of the Leveling the Playing Field Act.

Portman’s testimony can be found below:

“Thank you, Ambassador Froman for giving us the opportunity to testify today. I would also like to thank the Departments of Commerce, State, Treasury, Labor and DHS for hearing us out.  In my view, the timing of this hearing is critical, because the steel industry is in a crisis. 

“Back home in Ohio, the headlines are about layoffs in the steel industry. Last year there were more than 1,500 layoffs in Ohio.  And, as you’ve heard this morning, Ohio isn’t alone – in 2015 there were more than 13,000 industry layoffs nationwide.

“Steel workers are struggling through no fault of their own. They are doing their part producing the highest quality product anywhere, more efficiently than ever. We must do our part and enforce our trade laws aggressively so they can compete on a level playing field.

“Steel companies and workers in Ohio are concerned that there appears to be no light at the end of the tunnel. Not only did record amounts of foreign steel enter the U.S. last year, but domestic steel mills shipped 12 percent less steel than they did the year before. With the domestic market saturated and foreign markets closing, the U.S. steel industry operated at 60 percent of capacity in the last week of 2015. And prospects aren’t improving.  Despite making noise about cutting output, China’s biggest listed steelmaker announced late last month that it expects to increase output by 20 percent in 2016. And this is after a record level of steel – 112 million metric tons – was exported from China in 2015.

“Consider AK Steel, which is based in West Chester, Ohio and has 4,000 workers in my state. Last summer, I visited their plant in Zanesville, Ohio where I met with USW members who produce high tech steel called Grain Oriented Electrical Steel, or GOES, which is a silicon alloy used in the power generation and transmission industry. AK Steel is one of only two GOES producers in the United States, and one of only a handful of producers around the world. They produce this steel with 250 United Auto Workers, and export it all over the world.

“Back in 2010, China imposed antidumping and countervailing duties on American-made GOES. They claimed that American producers received subsidies through Buy America provisions in the stimulus bill. That wasn’t true, but these Chinese-imposed duties reduced US GOES shipments to China by 92 percent from what had been hundreds of millions of dollars a year in exports. The United States took China to the WTO, and won, but China appealed, not removing the duties. The United States took China to the WTO and won again. Instead of immediately removing the duties, China chose to run out the clock, only dropping them a few weeks before the WTO forced their hands. American-made GOES was kept out of China for five years, costing American workers hundreds of millions of dollars in orders.

“When US domestic producers of GOES sought relief from our government, they received none.

“In 2014, the International Trade Committee found that domestic industry was not injured in a case they filed against producers from several countries including Japan, Germany, China and Poland, despite surging imports and dropping prices.

“Last year, GOES producers were again cut out of a large international market. The EU announced it would be imposing duties on electrical steel from the United States, again putting millions of dollars of exports at risk.

“Simply put, American products have been shut out of China and the EU, and American workers can't get any relief from surging imports.

“Last year, because our trade laws had not kept up with international commerce, I co-authored the Leveling the Playing Field Act with Senator Brown, giving the Commerce Department and the ITC broader authority in AD/CVD cases.  President Obama signed this bill into law as part of the TAA extension last summer.

“As you know, in antidumping cases, the ITC must find ‘material injury’ before duties are imposed. Our proposal was a simple, reasonable clarification of U.S. law regarding the definition of material injury.  This is exactly what Congress always intended.  The legislation clarified that the ‘the [International Trade] Commission shall not determine that there is no material injury or threat of material injury to a domestic industry merely because the domestic industry, on a company, as a whole, is profitable or because the performance of the domestic industry has recently improved.’  Put simply, the definition of ‘material injury’ must relate to the specific product.

“We meant for this language to clarify that American companies will be able to take action once they are materially injured – but before they are gravely or severely injured and it is too late.  In the steel cases before the ITC this spring, it is imperative that the Commission use these new powers to their full extent. Our steel companies shouldn’t have to wait and watch subsidized or dumped imports drive them on the verge of going out of business or force them to lay off hundreds of workers before they can get relief.

“In the Leveling the Playing Field Act, we also gave the Department the ability to use ‘Adverse Facts Available’ in AD/CVD cases to incentivize foreign countries and companies to cooperate in investigations. Senator Brown and I recently sent Secretary Pritzker a letter on this very issue.  Specifically, if a country or a company doesn’t cooperate, the legislation established that the Department is not required to try to determine what an antidumping margin or countervailing duty rate would be if a respondent had provided information in an investigation.

“The language explicitly states that the Department does not have to corroborate any margin or countervailing duty applied and has the discretion to apply the highest countervailable subsidy rates or dumping margins in a proceeding. Neither is the Department required to prove that the margin or rate used in the investigation reflects the precise ad margin or CVD rate of the respondent.

“These measures are designed to dissuade foreign companies and countries from failing to provide relevant information in these cases. Commerce needs to use these powers that we gave them to do just that. 

“The ENFORCE Act is another piece of legislation I have supported. This legislation, which was signed as part of the customs bill, gives you the tools to prevent countries and companies from getting around AD / CVD duties. I urge you to use these tools, as well.

China & Market Economy Status

“Another area where we need to work together this year is on China’s pending claim that it should be graduated to market economy status in 2016.  What is already an import crisis will only be exacerbated by giving China – which has an overcapacity of 425 million metric tons in their market – the ability to more easily dump steel into the U.S.  In fact, three independent economists just completed a report finding that granting China Market Economy Status in anti-dumping cases would lead to losses of 400,000 to 600,000 American jobs.

“With market economy status, China could avoid effective enforcement of our anti-dumping laws because authorities would be required to start with the presumption that prices and costs in China are market determined – which we know isn’t true through their subsidizing of energy and raw materials and currency manipulation.

“So far, I’ve been encouraged by the Administration’s policy of inaction on this issue -  because it forces China to bring a challenge to the WTO and puts the onus on Beijing to prove that its centralized economic model is actually a market economy.  But we need to keep communicating to them why this is necessary. The U.S. should also be more aggressive in confronting Chinese over capacity – including addressing this issue in the WTO.

Currency:

“Finally, I’d like to talk about the need for our government – both Congress and the Administration – to aggressively address currency manipulation.  Last year, I received a letter signed by thousands of Ohio auto workers calling currency manipulation ‘the most critical barrier in the 21st century’

“These workers know that some of our competitors tilt the playing-field by manipulating their currencies, so that our American-made exports are more expensive, and our competitors’ exports into the United States are cheaper. That’s not fair.

“I will keep pushing my colleagues in Congress to pass legislation that contains enforceable currency manipulation protections, but the Administration needs to do its part by pushing the issue in bilateral talks and labeling foreign countries currency manipulators. 

Conclusion:

“And so, Mr. Ambassador, we need a strong offense and a strong defense. We need to play offense by expanding American access to foreign markets, and we need a strong defense that protects American workers from unfair imports.

“If we continue to allow foreign countries to cheat and to use dishonest tactics, then we will see more layoffs, more lost market share, and more closed factories. In turn, we risk the well-being of struggling families and communities.

“I’ve visited factories all across Ohio. Not once has anyone ever asked me to get them an unfair advantage. No one has ever asked that we tip the playing field. What they do want, and what I do hear, is a fair shot. All they’re saying is, some of our competitors are cheating. Give us a level playing field. Unlike some competitors overseas, Ohioans don’t need to cheat to win. If you give them a level playing field, they’ll win every time. If we aggressively enforce our trade laws and use the tools we have in law, our workers will prove it to all of us. Thank you.”

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