AIIS, Falls Church, VA

Protectionist trade policies threaten economic growth

Imposing duties on hot-rolled steel flat products from seven countries “would result in a negative effect upon the steel supply chain and, as a result, inhibit economic growth,” a representative of the American Institute for International Steel (AIIS) told International Trade Commission (ITC) staff on Tuesday. Six domestic steel companies are seeking to have antidumping duties imposed on the imports of certain hot-rolled steel flat products from Australia, Brazil, Japan, the Netherlands, South Korea, Turkey and the United Kingdom, and countervailing duties on imports of the products from Brazil, South Korea and Turkey.

During a preliminary hearing held by ITC staff on Tuesday to investigate the complaints, Lawrence Hanson, an attorney representing AIIS, warned of the impact that protectionist trade policies have on jobs and the U.S. economy.

“It is the position of AIIS that further restraint on imports of foreign steel would result in weakening the economy of the steel supply chain in the United States and threaten the jobs of members within that chain,” Hanson said. “Additional duty on the hot-rolled steel flat products at issue heightens the barrier to entry of these kinds of products and, as a result, sustains an advantage for domestic producers while discouraging foreign importation. This can have a negative impact upon economic growth and domestic production at efficient cost levels. Layoffs within the international steel supply chain are a likely result.”

Hanson went on to note references in a 2013 Peterson Institute for International Economics report to “empirical analysis that supports a finding of a parallel correlation between improvements in trade facilitation and increased trade volumes.”

“In such a case, the inverse is also true; impediments to trade reduce trade volumes,” Hanson said. “A decrease in trade translates directly into stunting economic growth. Those are precisely the kind of problems that barriers to free trade can produce. Within the steel industry, fewer restrictions upon the international steel supply chain mean greater efficiency and, therefore, increased growth.”

ITC staff is scheduled to file a report with the commission regarding the complaints by Sept. 18. The ITC is required to reach a preliminary determination in the case by Sept. 25 and to transmit its decision to the Department of Commerce by Oct. 2.

AIIS, Falls Church, VA