AIIS supports President's decision on 421 case

AIIS supports President's decision on 421 case

While steelworkers' unions are still fuming over President Bush's decision not to impose a sanction against Chinese standard pipe under Section 421, some people in the industry agree with the President that a quota on these products is, as the Mr. Bush said last week, "not in the national economic interest of the United States." In particular, the American Institute for International Steel (AIIS) agrees with the President's reasoning that the import relief would actually have an adverse impact on the United States' economy. "We are in full agreement with the President's reasoning for this decision," said AIIS President Dave Phelps in a news release sent out by the company today. "The costs to the US pipe consumers would far outweigh the benefits to the domestic industry. The cost of trade protection is always borne by the consumer, and we are pleased that this decision highlights that fact. All US trade law should require such a public interest test." The Washington D.C.-based trade association believes that the increase in pipe and tubing imports from China this year resulted from US trade protection against other steel products from China, namely hot rolled sheet, which is needed to make pipe and tubing. "To correct this problem with yet more trade protection would have been adding folly to folly," said Mr. Phelps. AIIS also believes that providing trade relief under the controversial Section 421 might have ignited another complaint against the U.S. in the midst of the critical Doha round, which would work against the nation in 2006, "a critical year for negotiations," according to Mr. Phelps. Section 421 was added to the Trade Act of 1974 by the U.S.-China Relations Act of 2000. The law was put in place to establish trade sanctions to deal with increased imports from China for the first 12 years after China's entry into the WTO. The Chinese standard pipe case is the sixth attempt by a US industry to seek trade sanctions under Section 421.