AMERICA'S JOBS AT STAKE

AMERICA'S JOBS AT STAKE

Over the past weeks, we have been witnesses to a drama unfolding in Washington, D.C. While it does not deal with security-related issues associated with our war on terrorism, the security of thousands of American jobs are at stake. Two industries, one born of the industrial age and the other older than the nation itself, have been unceremoniously pitted against each other in a bid to save one of them from virtually disappearing. Domestic steel has placed American seaport jobs in an opposite corner in a bid to save itself. As most JoC Week readers are aware, the domestic steel industry has been dealing with difficult times over the past 30 years. With the steel industry owners facing ever-increasing costs, we have watched any number of fully integrated mills shut their doors. At the same time we have witnessed the rise of the mini-mill, a smaller, more-efficient version of the mid-century steel mills. Nevertheless, segments of the steel industry appear to be unwilling to accept these changes and are seeking some sort of resolution that can protect their way of life. They have taken their grievances before the International Trade Commission and filed a Section 201 complaint.

A Section 201 complaint differs from the standard 'anti-dumping' complaint in that the domestic steel industry is attempting to prove that the plight it faces is solely the result of the existence of imported steel. The first set of hearings, completed in September, were the 'injury' phase hearings, with domestic steel pitted against foreign steel. The domestic steel industry convinced the six ITC commissioners that injury had occurred, resulting in the hearings moving toward the second phase, the 'remedy' phase.Here's where we see one American industry thrown against another. Foreign steel represents an important part of our nation's imports. Many American businesses rely upon imported steel to use American labor to produce finished products. Equally important are the American jobs that move the steel through American ports to those manufacturers. Sometimes referred to as a second tier industry, as not directly related to the production of steel, these jobs are nonetheless as important to the nation as those in the domestic steel industry. So important that the Maritime Exchange for the Delaware River and Bay, a non-profit trade association, took the initiative with port leaders to create a coalition of nearly 30 major U.S. ports and port-related stakeholders to bring this to the attention of the ITC.

On Nov. 6, the Free Trade in Steel Coalition testified before the ITC. The basic premise is simple -- while the coalition sympathizes with the plight of the domestic steel industry, saving jobs in that industry must not put other American jobs at stake. The coalition chooses not to debate whether the U.S. domestic steel industry has been injured but is certainly sensitive to their concerns, including legacy costs. However, the coalition is uniquely qualified to speak on behalf of the U.S. port and maritime transportation sectors and is working to ensure that any remedy actions do not in turn ultimately prove detrimental to the port industry. In fact, the coalition argued that remedies do exist that will not affect:

-- More than 38,000 direct, induced and indirect jobs for U.S. residents created by the handling of the imported steel.

-- $1.7 billion of direct, induced and indirect wages and salaries.

-- $576 million in tax revenue for local, state and federal governments.

These statistics illustrate a thriving U.S. industry that provides a great deal of employment and revenue for Americans across the nation. The Free Trade in Steel Coalition believes the ITC will take this into account when proposing remedies. Tariffs and sanctions will not only create an unstable economic paradigm for steel, they will also result in the net loss of American jobs as the growth in domestic steel employment will be minuscule compared to the loss of port-related employment. The proposed 40% to 50% tariffs would effectively result in an embargo on steel imports. Rather, the coalition urges the ITC to propose other remedies such as loan guarantees or training and education programs that will help alleviate the financial burden of legacy costs and address the needs of displaced workers.

The bottom line is domestic employment. By sacrificing one industry to save another, we have unwittingly placed Americans in a lose-lose situation. Save both and all of America wins.

Dennis Rochford is president of the Maritime Exchange for the Delaware River and Bay and helped coordinate the Free Trade in Steel Coalition. He can be reached via e-mail at drochford@maritimedelriv.com.