IMRA Challenges Legislated Protections

The International Mass Retail Association challenged legislated trade remedies to protect the lumber and steel industries and called upon the International Trade Commission (ITC) to consider the impact on consuming industries and the overall economy when recommending remedies to benefit the lumber and steel industries.

IMRA made these comments in its written statement for today's Senate Finance Committee hearing on "Sectoral Trade Disputes: Lumber and Steel."

"IMRA generally supports U.S. trade laws, when they are used correctly. However, these trade laws should not be used to help those industries with a long history of poor management, or who have already been provided long-term protection from foreign competition through other avenues. In both the softwood lumber and steel cases, IMRA believes there are serious questions about the application of U.S. trade law.

"Trade remedy cases, and other forms of trade protection, immediately disrupt the marketplace and drive up consumer costs. In many cases they have no impact in bringing business back to the United States, but only drive it into new areas of the world. The current remedies will result in more jobs lost than saved."

Lumber

In the case of lumber, housing costs rose about $1,000 per home as a result of the recently expired U.S. Canada Softwood Lumber Agreement (SLA). "The Census Bureau estimates that an increase in construction costs of this magnitude denies as many as 300,000 low- and moderate-income American families from home ownership," IMRA stated. As a result of anti-dumping and countervailing duty cases brought by the domestic lumber industry, the U.S. is attempting to negotiate another "solution" to the alleged subsidization of Canadian softwood lumber. "When every suggested 'solution' includes an export tax on softwood lumber that IMRA's members and customers will pay, we have very strong objections," IMRA stated. It is estimated that a 15% export tax such as that implemented in 1986 would cost U.S. consumers $900 million dollars a year.

In the case of steel, IMRA contends that special remedies for U.S. steel producers will lead to increased costs for all products that U.S. retailers use and sell, such as appliances, hand tools, farm equipment, trucks and shipping containers made from steel.

"Once again, IMRA has grave concerns about how an industry where more than half of the imports are already subject to dumping orders and where imports are declining is allowed to seek additional protection under Section 201," IMRA stated. "While it is true that Section 201 is designed to provide temporary relief for industries to adjust to fair trade, the fact remains that imports are not the problem facing U.S. steel producers. Their failure to modernize and improve productivity and quality certainly is.

"Nevertheless, if remedies are provided, U.S. down-stream consumers-among them IMRA's members and their customers-will surely foot the bill.

"A recent report by the Consuming Industries Trade Action Coalition, of which IMRA is a member, found that the December 7 recommendations by the International Trade Commission on the Section 201 steel case would have detrimental effects on the U.S. economy. Tariffs as proposed by the ITC would lead to increased costs for steel inputs, which could lead to increased imports of finished steel-containing products. As a result, up to 74,500 jobs could be lost in all sectors. Essentially eight steel-consuming industry jobs would be lost for every one steel-producing job protected at a cost to the American consumer of up to $450,000 per job protected."

"IMRA strongly urges Congress to let the current cases run their course. Congress should not pass legislation to help these industries, even if the cases don't go their way. Finally, we urge Congress to review our current procedures to ensure that the larger national interest is reviewed and considered."

For more information on IMRA, visit the Web site www.imra.org.

The International Mass Retail Association--the world's leading alliance of retailers and their product and service suppliers--is committed to bringing price-competitive value to the world's consumers. IMRA improves its members' businesses by providing industry research and education, government advocacy, and a unique forum for its members to establish relationships, solve problems, and work together for the benefit of the consumer and the mass retail industry. IMRA represents many of the best-known and most successful retailers in the world, who operate thousands of stores worldwide. IMRA equally values among its members hundreds of the world's top-tier product and service suppliers, working with their retailer partners to further the growth of the mass retail industry.