As we move into 2009 with a
new administration and a new Congress, the steel industry will
be aggressive in its efforts to advance a pro-manufacturing
agenda. The domestic steel industry looks forward to working
with Barack Obama's administration and members of the 111th
Congress in order to advance this agenda, which we believe will
strengthen the economy and benefit all Americans.
The steel industry, a fundamental
component of the U.S. manufacturing sector, generates 1.2
million jobs and contributes $350 billion a year to the
economy. To keep this engine revved, however, the U.S. must
support trade, climate, energy and transportation policies that
bolster America's competitiveness in the global marketplace as
well as policies which strengthen and secure America's
Trade remains an important legislative
issue for the domestic steel industry. The U.S. manufacturing
sector is still a vital national economic and strategic asset,
and one that can thrive only if there is a level playing field
that allows American companies the opportunity to compete in
the global marketplace. Unfortunately, however, U.S. industry
continues to bear the brunt of unfair trade practices that
violate World Trade Organization (WTO) rules and U.S. trade
A good example in the global arena is
the Chinese government's subsidization of its domestic steel
industry ($52 billion over the past 10 years), which has led to
excess capacity, an artificial undervaluation of its currency
and lax environmental standards, to point out just the top of
the list of practices distorting the international steel
market. More manufacturing jobs, specifically steel jobs, are
going to be shipped overseas unless the new administration
takes a strong stand in favor of enforcing current trade
The American Iron and Steel Institute
(AISI) and the domestic steel industry urge the new
administration and Congress to establish and enforce trade
policies that will truly level the international playing field
for all manufacturing. This includes a significant revaluation
of China's currency and new tools to fight currency
misalignment, implementing and enforcing stronger trade laws
and fixing WTO tax and trade inequities.
The United States and other countries
committed to the operation of free markets in international
trade must enforce the rules of trade-rules that some countries
have agreed to but are ignoring.
The American steel industry has already
made great strides in reducing its energy intensity. In fact,
since 1975 the industry has collectively invested more than $60
billion in new technology to improve energy efficiency and
since 1990 energy consumption per ton of steel shipped has
dropped by 33 percent. We are doing our part to improve the
industry's energy efficiency but we are an industry that needs
sound energy legislation in order to stay competitive.
Like other significant energy-consuming
industries, American steel's competitiveness is largely
influenced by the cost of energy. If U.S. energy costs continue
upwards unabated, it will increase the likelihood that foreign
manufacturers with access to more-affordable energy will
capture U.S. jobs and domestic market share.
In order to have a robust and
competitive manufacturing base in the United States, it's key
to have access to a reliable, affordable and abundant energy
supply. The nation has suffered too long without a
forward-looking energy policy. We must act expeditiously to
promote development of U.S. energy resources to help secure
future economic growth. Failure to do so puts our economy,
manufacturing and steel industry at risk.
Climate change legislation
When it comes to climate change, the
American steel industry is part of the solution in this
discussion, not the problem.
The domestic steel industry is the most
efficient in the world. In addition to energy-reduction
initiatives, steel is in the forefront of recycling. In fact,
steel is the most recycled material in the United States-more
than all other materials combined. Using more scrap metal in
the steelmaking process significantly reduces greenhouse gas
emissions and we believe that the recycling issue must be part
of any approach to the reduction of such emissions.
Even though we are a leader on the
issue of climate change, we are not standing still. Since
carbon is still necessary in the current steelmaking processes,
we are working on aggressive research programs to develop the
next generation of iron and steelmaking technologies that will
drastically reduce or eliminate carbon dioxide emissions. In
addition, we have, and are developing, new types of steel
products that lead the way in reducing the greenhouse gas
emissions footprint of our customers. For instance,
high-strength steel allows automobiles to be designed with a
much lower vehicle weight, thus requiring less fuel, all while
maintaining vehicle safety.
We believe that any climate-change
legislation must hold foreign manufacturers to comparable
standards; if not, we can predict that U.S. manufacturing jobs
will migrate to countries with lower environmental standards,
thus actually increasing global greenhouse gas emissions. The
carbon footprint of major foreign competitors selling in the
U.S. market is substantially higher than that of the domestic
industry as a whole.
We believe that any competitiveness
provisions should apply simultaneously to domestic and foreign
companies selling in the U.S. market and use the same baseline
periods; they should not invite subsidies by foreign
governments and should not enable the administration to waive
the requirements for foreign manufacturers.
A globally competitive economy depends
on an effective and efficient infrastructure. Last year, the
American Society of Civil Engineers rated 15 categories of
infrastructure as being in poor condition-indicating room for
improvement, which will create significant demand for U.S.
manufacturing and steel fabricated products. The passage of the
Transportation Equity Act addressed a major portion of the
infrastructure expansion and improvement in the United States
and provided a high-profile opportunity for steel; however,
that act needs to be renewed.
While some highway and transportation
infrastructure issues are being addressed through current law,
it is becoming apparent that a broader public policy approach
needs to be considered to address long-term infrastructure
requirements of the country. These go beyond highways and
bridges to include water needs, power distribution, flood
control, ports and navigation, as well as homeland security and
defense (to name a few). The expansion of "Buy American"
provisions to other federal programs should be considered as
well as the enforcement of existing "Buy American" laws.
Now is the time for our country to
re-invest in itself. The AISI will continue to call for a
comprehensive, long-term approach to keeping America's
infrastructure system safe, sturdy and reliable.
This is a critical time for our nation,
especially with the current economic situation. The new
administration and Congress have daunting challenges ahead of
them, as do we in the manufacturing and steel sectors. It is
our commitment to work tirelessly to keep U.S. manufacturing
competitive and viable domestically and globally.
In order to do this, we need to work
with the new administration and Congress on crafting
legislation that will promote U.S. manufacturing and U.S. jobs.
We need strong and enforceable trade laws, an approach to
climate change that holds foreign manufacturers accountable, an
energy policy that brings real energy security to our nation,
and investments to strengthen and modernize America's
infrastructure. It will be important for all of us in the
manufacturing sector, whose health is vital to economic
revival, to identify a broad and unifying agenda that we can
work on and advance together.
THOMAS J. GIBSON