One of the principles of negotiations is this: The negotiating partners have to trust that everyone at the table is truthful in making their arguments.
Truth, unfortunately, has become a fungible commodity in Washington, easily exchanged for manipulated statistics or blatantly one-sided information.
A recent example is a blog published in The Hill last week by a steel executive from Cincinnati, Burke Byer, complaining about “dumping” of a steel product – rebar – on the U.S. market from Mexican and Turkish manufacturers.
Rebar is the steel that is used in construction to strengthen concrete. In fact, no major construction project can be built without it. Indeed several millions of tons of rebar are sold and used in the U.S. every year.
My company, Deacero, was begun by my father more than a half-century ago with ten employees. Along with my five brothers, we have helped grow that business to the point that we employ 7,200 workers including – and you won’t find this in Mr. Byer’s blog – 700 workers in the United States, in factories in such states as Texas and Missouri.
Among the incorrect facts put forth by Mr. Byer is that Turkish and Mexican rebar manufacturers have captured 20 percent of the U.S. market utilizing an unfair labor practice known as “dumping.” The central fact – 20 percent – is incorrect by a significant amount. U.S. government statistics show that in 2012, the last full year for which there is data, Mexico and Turkey accounted for 12.4 percent of the U.S. rebar market. Of that, Mexico accounted for four percent. By the first half of 2013, the total imports from Mexico and Turkey had grown to 16.6 percent of the U.S. rebar market, but Mexico’s share was almost static: 4.1 percent.
To claim that a small manufacturer in Monterrey, Mexico, is the cause of Mr. Byer having to lay off 25 percent of his workforce is to ignore some other, serious problems in his business model.
Another point that should be made in the discussion that Deacero is ruining the U.S. steel market: The total steel balance of trade between the U.S. and Mexico in 2013 was $2.7 billion in the favor of U.S. companies. If any NAFTA partner might have a gripe about an imbalance in the steel trade, it is Mexico, not the U.S.
The steel industry in the U.S. has employed highly paid lobbyists to convince members of the U.S. House and Senate that they need “protection” against small companies like mine, which are guilty of nothing more than having good managers and great workers. In Mexico, we even have far higher costs for energy, which comprises about two-fifths of the expense in steel production.
We understand that in the United States large corporations want the federal government out of their business unless they need the federal government to shield their business against fair but tough competition. One of the reasons we understand U.S. activities is that my five brothers and I all graduated from Purdue University in Indiana – about as close to middle America as we could get.
Mr. Byer and other rebar manufactures have complained to the U.S. International Trade Commission (which is, in spite of its name, not an international body but a U.S. organization). We have responded by proposing a settlement (in the world of international trade this is called a “suspension agreement”) that proposes certain modifications in trade practices that might alleviate if not cure the issues that the U.S. steelmakers have raised.
This is not an admission of anything; any more than making a offer on a new car is an admission of anything, other than you want to come to a deal on a car.
Negotiations are just that: Give and take. Talk and listen. Trust and be trusted. We have made an offer, reached out a hand in the best spirit of the 20th anniversary of the North American Free Trade Agreement.
We have a table, but we have empty seats. We await the U.S. steel industry, with a blessing from the Commerce Department, joining us to iron these issues out.
Gutierrez is co-CEO of Deacero.