Kudos
to Rep. Joe Knollenberg! Bill Would Consider Consumers
Currently when a U.S. firm or industry feels that it is being harmed by imports
that are priced unfairly low or subsidized by its home government, the U.S.
firm or industry has the right to petition the U.S. government for protection
in the form of a duty, or border tax. Anti-dumping (AD) duties are imposed
on imports that are sold in the U.S. for less than their "fair"
or "normal" value. Fair or normal value is usually the price at
which the foreign manufacturer sells the product in its home country. Countervailing
(CV) duties are imposed on imported goods to offset government subsidies to
producers or exporters of these goods. CV duties may be imposed only if these
subsidies are deemed to cause or threaten to cause injury to the U.S. industry.
The CV and AD duty is meant to be mechanism by which to increase the price
of the imports when they enter the U.S. market, so that they do not have a
competitive edge over goods made in the United States.
Unfortunately, our current system fails to consider how any anti-dumping (AD) or countervailing (CV) duties might impact U.S. firms that need these imports to manufacture their products. As a result, many downstream manufacturers pay a higher price for their imports and this hurts their bottom line. Companies who are locked into a contract cannot always pass the cost of these duties on to their customers. Those who do risk losing their customers to manufacturers operating in countries with no steel tariffs. Some companies choose to move overseas (taking jobs with them) where they can have access to duty-free steel. All sorts of downstream industries suffer the consequences of duties.
Introduced at the end of 2005, Rep. Knollenberg's bill attempts to address this flaw in U.S. law by giving "industrial users" status in anti-dumping and countervail cases. The bill requires that the International Trade Commission (ITC) and U.S. Department of Commerce (DOC) allow full participation of consuming industries when determining whether a domestic industry has been hurt by imports. The bill also would require an economic impact test to be conducted by the ITC to determine the net effect on American companies. In order for a duty to be imposed, the test must show it would provide more overall economic benefit than harm. The impact of duties on industrial users of imported goods must be considered in addition to those who request the duties and the duty would then only be imposed if it was clear that it would not hurt more Americans than it helped. This seems like common sense to us at Consumers for World Trade. According to Rep. Knollenberg, "American companies are directly impacted by these decisions, but they are not even considered in the process. In fact, foreign producers have more rights in this process than our own American industrial users. This is especially disturbing since steel consuming jobs outnumber steel producing jobs by over 60 to 1."
CWT urges its members and friends to support H.R. 4217 by encouraging their representatives to sign on to the bill as a co-sponsor. The current list of co-sponsors is printed below:
Rep Biggert, Judy [IL-13]
- 11/7/2005
Rep Blunt, Roy [MO-7] - 11/3/2005
Rep Boehner, John
A. [OH-8] - 11/3/2005
Rep Camp, Dave [MI-4] - 11/3/2005
Rep Chocola, Chris
[IN-2] - 12/6/2005
Rep Dreier, David [CA-26] - 11/3/2005
Rep Duncan, John
J., Jr. [TN-2] - 11/17/2005
Rep Ehlers, Vernon J. [MI-3] - 11/3/2005
Rep Hoekstra, Peter [MI-2] - 11/3/2005
Rep Hostettler, John N. [IN-8] - 12/6/2005
Rep Kennedy, Mark R. [MN-6] - 11/3/2005
Rep Kind, Ron [WI-3] - 11/3/2005
Rep Kirk, Mark Steven [IL-10] - 11/3/2005
Rep Kuhl, John R. "Randy", Jr. [NY-29] - 12/6/2005
Rep Manzullo, Donald A. [IL-16] - 11/3/2005
Rep McCotter, Thaddeus G. [MI-11] - 11/3/2005
Rep McCrery, Jim [LA-4] - 11/17/2005
Rep Miller, Candice S. [MI-10] - 11/3/2005
Rep Moran, James P. [VA-8] - 11/3/2005
Rep Northup, Anne M. [KY-3] - 11/17/2005
Rep Paul, Ron [TX-14] - 12/7/2005
Rep Ramstad, Jim [MN-3] - 11/3/2005
Rep Rogers, Mike [MI-8] - 11/3/2005
Rep Ryan, Paul [WI-1] - 11/3/2005
Rep Schwarz, John J.H. "Joe" [MI-7] - 12/6/2005
Rep Towns, Edolphus [NY-10] - 12/6/2005
Rep Upton, Fred [MI-6] - 11/3/2005