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By Sen. Jay Rockefeller, D-W.Va. An invasion of foreign steel has entered U.S. markets, causing severe injury to one of America’s great and essential industries. The last several months have seen steel industry bankruptcies, depressed orders for domestic steel and 10,000 layoffs - nearly 1,000 of which are in West Virginia. As cheap imports continue to arrive, as many as 100,000 jobs hang in the balance. Yet despite the damage, many have argued that little or nothing should be done. In recent remarks, Federal Reserve Board Chairman Alan Greenspan addressed the benefits of open markets. Without question, open trade contributes to higher living standards worldwide and has meant real benefits for our economy. Moreover, global competition will inevitably lead to more efficient and productive technologies. However, Mr. Greenspan contends, from a purely theoretical standpoint, that all trade is beneficial and all barriers to trade are disruptive. That notion is flawed when examined in the complex and unpredictable light of the international market. Free trade in its most natural form - cross market commerce without restrictions - is an ideal to which our politically diverse world is not suited. However, open trade, in accordance with basic rules and restrictions to ensure fairness, is both a desirable and achievable world goal. Contrary to Mr. Greenspan’s assertion that U.S. anti-dumping and countervailing duty laws are "simple guises for inhibiting competition," these statutes have been carefully constructed to ensure that foreign nations do not violate agreed upon principles of international law. These laws impose duties or tariffs on nations who "dump" their products at costs below what they can command in their own home market, and are used to protect industries from low-cost imports originating from nations that subsidize their manufacturers. Since the end of World War II, as Chairman Greenspan knows, the international community has accepted these rules as both appropriate and necessary to prevent trade abuses. They are essential in ensuring that the playing field on which U.S. industries compete is level. Mr. Greenspan argues that the playing field need not be level. A process he terms "creative destruction" will ensure that, absent trade barriers, technologically superior producers will dominate the market and create a better and less expensive product. This idealistic, one size fits all vision is flawed. Take steel as an example. Over the past 15 years American steel producers have spent billions of dollars and sacrificed hundreds of thousands of jobs to become the most efficient in the world. In a standard measure of productivity, the number of man hours per ton of steel manufactured, the U.S. leads the world. Not only have innovations boosted efficiency, but the quality of the America product is second to none and our production method is the least environmentally intrusive. Under an assault from dumped steel, however, our domestic industry -- despite its pure competitive advantage -- is suffering. In the current steel crisis it is the U.S. industry that is losing -- not the least efficient producers. If our country fails to take decisive remedial action, less-streamlined foreign companies will replace their superior American counterparts and the U.S. will soon be without a vigorous steel industry to rely on in times of national crisis. Furthermore, steel employment will fall; communities like Weirton, will suffer, and the world steel industry will be worse off without the U.S. paving the way for advancements. The view that anti-dumping and countervailing duty laws are inhibitors of free trade also ignores political realities. The existence of strong trade laws, and the promise of vigorous enforcement, has actually allowed American companies and the public to support further trade expansion, such as providing the president with fast-track negotiating authority. Without an effort to give U.S. procedures roughly equal opportunities to succeed in the global marketplace, political support for free trade in this country will disintegrate. Public support for free trade also hinges on the human factor. People and communities need jobs -- high paying jobs like those being lost in the steel industry. Low employment is a major factor in our current record level of consumption and the corresponding economic boom. Efforts to preserve jobs in the face of unfair foreign competition are not reckless, as has been suggested, but rather are vital policy decisions aimed at maintaining our economic health. The wholesale elimination of trade barriers that Chairman Greenspan praises is unrealistic and potentially devastating. Most Americans agree that nations must have appropriate recourse to protect against unfair trading practices. In fact, given the example of steel, one could easily argue that more should be done to protect domestic industries. The reality is, the complex dynamics of trade are swift to create situations that do not conform to the mold of creative destruction. Finally, as we debate the often staid subject of trade policy, we must always remember that people do matter. This country, in order to maintain its prosperity, must focus on the creation of jobs that allow working families to share in our nation’s good fortune. For this reason, I support free trade. However, if it is to work over the long-term, it must be conducted within a sensible structure which ensures that free trade is also fair trade. |
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