President Obama proudly and justifiably has proclaimed on many occasions:
“We have the best workers and the best businesses in the world. They turn out the best products. And when the playing field is level, they'll always be able to compete and succeed against every other country on Earth.”
We agree. Trade is supposed to be a two-way street. Unfortunately, all too often, we find U.S. exporters facing barriers to their products around the globe, and predatory trade practices flooding our market with unfairly traded imported goods. American businesses -- and the families of those workers of whom we are so rightly proud -- are the ones who pay the price of those predatory practices.
For decades now, the American steel industry has been under a full-scale assault by many of our foreign trading partners –primarily through the dumping of unfairly priced products into our markets. Through the years, the industry has fought hard to keep our jobs and communities strong.
After the industry survived dumping assaults from foreign countries, United States Steel Corporation bet on our American employees and American ingenuity – in this case, again in the area of energy security and independence. The company reinvigorated production of Oil Country Tubular Goods (OCTG) – steel pipes used in the extraction and exploration of oil and natural gas.
Unfortunately as the U.S. OCTG market began growing, Chinese enterprises began dumping massive amounts of OCTG products into the American market, at prices far less than fair market value. As a result, United States Steel and other domestic OCTG producers filed a dumping action in 2008. We eventually won that case in 2009, but not before domestic facilities were idled, thousands lost their jobs, and our communities and families sustained significant and long-lasting injury.
However, our position was validated – after we won the case, Chinese producers abandoned the American OCTG market, a clear sign that they could not compete when the playing field was leveled.
The reprieve for the U.S. OCTG industry from dumping evaporated in an instant. South Korean producers quickly seized the opportunity created by the Chinese and began flooding America with their own below-fair-value pipe.
The only difference between 2009 and today is that South Korean OCTG producers are far cleverer about concealing their business actions. They obscure the true costs of producing steel, and inadvertently or intentionally misrepresent facts regarding sales, manufacturing and raw materials sourcing. This trickery and gamesmanship is often done without any punishment for a long time before being revealed under the rule of law.
These same foreign companies have successfully built businesses for what seems the express purpose of circumventing our trade laws, creating a playbook for future use by other foreign companies. This playbook provides a dumping “roadmap” which ultimately squeezes U.S. products out of our markets. As a result, American companies who play by the rules – and can fairly compete on a level trade law playing field – are actually brought to their knees. “Dumpers” win in the long run once U.S. products are no longer in the market by raising their artificially low prices, which ultimately hurts consumers.
As a result, a year ago, U.S. Steel and other domestic OCTG producers filed a trade case against nine countries based on the enormous 113-percent increase of OCTG products dumped into this market from 2010 to 2012. South Korean companies are the main offenders, but companies from India, Vietnam, Turkey and several other countries also dump very significant volumes.
Since nearly 98 percent of South Korean OCTG is exported to the US, and none of their OCTG is sold in the South Korea market, the emerging evidence could reflect a government supported or encouraged export program.
In February, the Department of Commerce issued a preliminary ruling based on incomplete and inaccurate data provided by the South Korean companies, which was unfavorable to the American OCTG producers’ and workers’ case. On or before July 10, the Department of Commerce will issue its final determination in this case.
To be clear: we want no favors. We are certain that when fair trade laws are enforced with South Korean OCTG companies, they will not be able to supply high-technology products to the U.S. We simply want our government to fully enforce and uphold our laws..
In his 2013 State of the Union address our president said, “If the playing field is level, I promise you: America will always win.”
We agree with President Obama. All we ask for is a level playing field – one that our trade laws promise – and with that, we promise that we will win.
Gerard is International president of United Steelworkers International. Longhi is president and CEO of United States Steel Corporation.