For Immediate Release
Office of the Press Secretary
March 5, 2002
Presidential Memo on Steel
March 5, 2002
MEMORANDUM FOR THE SECRETARY OF THE TREASURY
THE SECRETARY OF COMMERCE
UNITED STATES TRADE REPRESENTATIVE
SUBJECT: Action Under Section 203 of the Trade Act
of 1974 Concerning Certain Steel Products
On December 19, 2001, the United States International Trade
Commission (ITC) submitted a report to me that contained determinations
pursuant to section 202 of the Trade Act of 1974, as amended (the
"Trade Act"), that (a) certain carbon flat rolled steel, including
carbon and alloy steel slabs, plate (including cut-to-length plate and
clad plate), hot-rolled steel (including plate in coils), cold-rolled
steel (other than grain-oriented electrical steel), and
corrosion-resistant and other coated steel (collectively, "certain flat
steel"); (b) carbon and alloy hot-rolled bar and light shapes
("hot-rolled bar"); (c) carbon and alloy cold-finished bar
("cold-finished bar"); (d) carbon and alloy rebar ("rebar"); (e) carbon
and alloy welded tubular products (other than oil country tubular
goods) ("certain tubular products"); (f) carbon and alloy flanges,
fittings, and tool joints ("carbon and alloy fittings"); (g) stainless
steel bar and light shapes ("stainless steel bar"); and (h) stainless
steel rod are being imported into the United States in such increased
quantities as to be a substantial cause of serious injury, or the
threat thereof, to the domestic industries producing like or directly
competitive articles. The ITC commissioners were equally
divided with respect to the determination required under section 202(b)
regarding whether (i) carbon and alloy tin mill products ("tin mill
products"); (j) stainless steel wire; (k) tool steel, all forms; and
(l) stainless steel flanges and fittings ("stainless steel fittings")
are being imported into the United States in such increased quantities
as to be a substantial cause of serious injury, or threat of serious
injury, to the domestic industries producing like or directly
competitive articles. The ITC provided detailed definitions
of the products included in categories (a) through (l) and their
corresponding subheadings under the Harmonized Tariff Schedule of the
United States (HTS) in Appendix A to its determination, set out at 66
Fed. Reg. 67304, 67308-67311 (December 28, 2001).
The report of the ITC also contained findings pursuant to section
311(a) of the North American Free Trade Agreement Implementation Act
(the "NAFTA Implementation Act") as to whether imports from Canada and
Mexico, considered individually, account for a substantial share of
total imports and contribute importantly to the serious injury, or
threat thereof, caused by imports. The ITC made negative
findings with respect to imports from Canada of certain flat steel, tin
mill products, rebar, stainless steel rod, and stainless steel wire;
and also made negative findings with respect to imports from Mexico of tin mill
products, hot-rolled bar, cold-finished bar, rebar, certain tubular
products, stainless steel bar, stainless steel rod, and stainless steel
wire. The ITC made affirmative findings with respect to
imports from Canada of hot-rolled bar, cold-finished bar, carbon and
alloy fittings, and stainless steel bar; and also made affirmative
findings with respect to imports from Mexico of certain flat steel, and
carbon and alloy steel fittings. The ITC commissioners were
equally divided with respect to imports from Canada of certain tubular
products. By February 4, 2002, the ITC provided additional
information in response to a request under section 203(a)(5) of the
Trade Act ("supple-mental report") made by the United States Trade
Representative (the "USTR") on January 3, 2002.
Having considered the determinations of both groups of
commissioners with regard to tin mill products, tool steel, stainless
steel wire, and stainless steel fittings, I have determined, pursuant
to section 330(d)(1) of the Tariff Act of 1930, as amended, to consider
the determinations of the groups of commissioners voting in the
affirmative with regard to tin mill products and stainless steel wire
to be the determination of the ITC, and the determinations of the
groups of commissioners voting in the negative with regard to tool
steel and stainless steel fittings to be the determination of the ITC.
By Proclamation signed today (the "Proclamation") and after
considering all relevant aspects of the investigation, including the
factors set forth in section 203(a)(2) of the Trade Act and the
supplemental report, I have implemented actions of a type described in
section 203(a)(3). I have determined that the most
appropriate actions are safeguard measures in the form of an increase
in duties on imports of certain flat steel, other than slabs (including
plate, hot-rolled steel, cold-rolled steel, and coated steel),
hot-rolled bar, cold-finished bar, rebar, certain welded tubular
products, carbon and alloy fittings, stainless steel bar, stainless
steel rod, tin mill products, and stainless steel wire, as defined in
paragraph 7 of the Proclamation, and in the form of a tariff rate quota
(TRQ) on imports of slabs, with an increase in currently scheduled
rates of duties for imports over the TRQ limits. I have
implemented these safeguard measures for a period of 3 years plus 1
day.
Specifically, I have established the following safeguard measures:
(a) certain flat steel: with regard to slabs,
a TRQ of 4.90 million metric tons in the first year of the measure, 5.35 million metric
tons in the second year, and 5.81 million metric tons in the third year,
with no increase in duties for imports below the within-quota level
and an increase in duties of 30% ad valorem for imports above the
within-quota level in the first year of the measure, 24% in the
second year, and 18% in the third year; and with regard to certain flat
steel, other than slab (including plate, hot-rolled steel,
cold-rolled steel and coated steel), an increase in duties of 30% ad valorem in
the first year, 24% in the second year, and 18% in the third year;
(b) hot-rolled bar: an increase in duties of
30% ad valorem in the first year of the measure, 24% in the second year, and 18% in the third
year;
(c) cold-finished bar: a increase in duties
of 30% ad valorem in the first year of the measure, 24% in the second year, and 18% in the
third year;
(d) rebar: an increase in duties of 15% ad
valorem in the first year of the measure, 12% in the second year, and 9% in the third year;
(e) certain welded tubular products: an
increase in duties of 15% ad valorem in the first year of the measure, 12% in the second year,
and 9% in the third year;
(f) carbon and alloy fittings: an increase in
duties of 13% ad valorem in the first year of the measure, 10% in the second year, and 7% in
the third year;
(g) stainless steel bar: an increase in
duties of 15% ad valorem in the first year of the measure, 12% in the second year, and 9% in the
third year;
(h) stainless steel rod: an increase in
duties of 15% ad valorem in the first year of the measure, 12% in the second year, and 9% in the
third year;
(i) tin mill products: an increase in duties
of 30% ad valorem in the first year of the measure, 24% in the second year, and 18% in the
third year; and
(j) stainless steel wire: an increase in
duties of 8% ad valorem in the first year of the measure, 7% in the second year, and 6% in the
third year.
Pursuant to section 312(a) of the NAFTA Implementation Act, after
consideration of the report and supplemental reports of the ITC, I
further determine that imports of certain flat steel, hot-rolled bar,
cold-finished bar, rebar, certain tubular products, carbon and alloy
fittings, stainless steel bar, stainless steel rod, tin mill products,
and stainless steel wire that are products of Canada and Mexico either
do not account for a substantial share of total imports of these
products, or are not contributing importantly to serious injury or the
threat of serious injury. Therefore, pursuant to section 312(b) of the
NAFTA Implementation Act, the safeguard measure will not apply to
imports of certain flat steel, hot-rolled bar, cold-finished bar,
rebar, certain tubular products, carbon and alloy fittings, stainless
steel bar, stainless steel rod, tin mill products, and stainless steel
wire that are the product of Canada or Mexico. Similarly,
the safeguard measures will not apply to imports of these products that
are the product of Israel or Jordan.
The safeguard measures also will not apply to imports of certain
flat steel, tin mill products, hot-rolled bar, cold-finished bar,
rebar, certain tubular products, carbon and alloy fittings, stainless
steel bar, stainless steel rod, or stainless steel wire that are the
product of a developing country that is a member of the World Trade
Organization (WTO), as long as that country's share of imports into the
United States of the product, based on a recent representative period,
does not exceed 3 percent, provided that all such developing country
WTO members collectively account for not more than 9 percent of total
imports of that product. For purposes of the safeguard
measures established under the Proclamation, I determine that the
beneficiary countries under the Generalized System of Preferences are
developing countries. Subdivision (d)(i) of U.S. Note 11 to
subchapter III of chapter 99 of the Harmonized Tariff Schedule of the
United States (Note 11) in the Annex to the Proclamation identifies
those developing countries that are WTO members, and subdivision
(d)(ii) identifies the products of such countries to which the
safeguard measures shall not apply.
I instruct the USTR to review data on imports of products listed in
paragraph 7 of the Proclamation from countries listed in subdivision
(d)(i) of Note 11 on a quarterly basis. If imports of such a
product from such a country increase by a material amount, I instruct
the USTR to initiate consultations with the country regarding the
circumstances under which the increase occurred and whether the country
plans to take action to reduce imports to historical
levels. If, on the basis of the information exchanged during
consultations, data on imports, domestic steel demand, growth in the
U.S. economy, shifts in other countries' trade patterns, and any other
relevant factors, the USTR determines that the increase in imports of
such product from such country undermines the effectiveness of the
pertinent safeguard measure, he is authorized, upon publication of a
notice of such determination in the Federal Register, to modify
subdivision (d)(ii) of Note 11 in the Annex to the Proclamation to
include such product from such country. I also authorize the
USTR, upon publication of a notice in the Federal Register, to change
the list of developing countries to which the safeguard measures do not
apply.
The steel products listed in clauses (i) through (ix) of
subdivision (b) of Note 11 in the Annex to the Proclamation were
excluded from the determinations of the ITC described in paragraph 2 of
that Proclamation, and are excluded from these safeguard
measures. I have also determined to exclude from these
safeguard measures the steel products listed in the subsequent clauses
of subdivision (b) of Note 11 in the Annex to the
Proclamation. The Trade Policy Staff Committee (TPSC) is
currently evaluating requests, submitted in response to 66 Fed. Reg.
54321, 54322-54323 (October 26, 2001), that particular products be
excluded from any safeguard measure with regard to certain steel
products. I instruct the USTR to determine whether these
particular products should be excluded and, if so, within 120 days of
the date of the Proclamation, to publish in the Federal Register a
notice to modify subchapter III of chapter 99 to exclude them from the
safeguard measures. In making this determination, the USTR
shall consider any advice rendered by the TPSC.
Similarly, I instruct the USTR, after receiving advice from the
TPSC, to determine whether any particular products should be added to
the list of those excluded from the safeguard measures and, if so, to
publish a notice in the Federal Register in March of any year in which
he receives such a recommendation to modify subchapter III of chapter
99 to exclude such particular products from the measures. I
further instruct the USTR, no later than 90 days from today, to publish
in the Federal Register a notice of the procedures by which interested
persons may request the TPSC to recommend whether to exclude a
particular product.
I also instruct the USTR, prior to the effective date of the
safeguard measures established in the Proclamation, to conduct
consultations under Article 12.3 of the Agreement on Safeguards with
any WTO member having a substantial interest as an exporter of a
product subject to such safeguard measures, provided that the WTO
member requests such consultations in a timely fashion. I
instruct the USTR to report to me on the results of such
consultations. I instruct the Secretary of the Treasury,
pursuant to section 505(a) of the Tariff Act of 1930 (19 U.S.C.
1505(a)), to prescribe by regulation a date no later than 45 days after
today at which estimated duties for merchandise entered, or withdrawn
from warehouse for consumption, on or after 12:01 a.m., EST, March 20,
2002, and up to the 30th day after today, shall be deposited.
I instruct the Secretary of the Treasury and the Secretary of
Commerce to establish a system of import licensing to facilitate the
monitoring of imports of certain steel products. Pursuant to
the authority granted me by section 203(g) of the Trade Act to provide
for the efficient and fair administration of all actions taken for the
purpose of providing import relief under section 203, I further
instruct the Secretary of Commerce, within 120 days of the effective
date of the safeguard measures established by the Proclamation, to
publish regulations in the Federal Register establishing such a system
of import licensing.
I have determined that the safeguard measures will facilitate
efforts by the domestic industries to make a positive adjustment to
import competition and will provide greater economic and social
benefits than costs. If I determine that further action is
appropriate and feasible to facilitate efforts by the pertinent
domestic industry to make a positive adjustment to import competition
and to provide greater economic and social benefits than costs, or if I
determine that the conditions under section 204(b)(1) of the Trade Act
are met, I shall reduce, modify, or terminate the safeguard
measures. In making this determination, I shall consider the
pertinent factors set out in section 203(a)(2) of the Trade Act and, in
particular, changes in capital and labor productivity in the domestic
industries; actual and planned permanent closures of inefficient steel
production facilities in the United States and in other countries;
consolidation of United States steel producers; capital expenditures in
the domestic industries; prices for certain steel products in the
United States; and the overall effect that maintaining the measure will
have on consuming industries, workers, and the United States economy as
a whole.
The United States Trade Representative is authorized and directed
to publish this memorandum in the Federal Register.
GEORGE W. BUSH
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