Might Congress consider a change in SIMA?
January 11, 2005
The U.S. Department of Commerce issued a call for comments in August on whether to extend the Steel Import Monitoring and Analysis (SIMA) system and how to improve the program if it lives on. The Precision Metalforming Association (PMA) of Independence, Ohio, which represents hundreds of metal stampers, has some ideas.
The program—set up after the elimination of the Section 201 steel tariffs to track steel imports and watch for dumping by foreign steel producers—is scheduled to expire in March. Former Commerce Secretary Donald L. Evans hinted that the program might disappear before the expiration date because the U.S. steel industry has reorganized and the international appetite for steel makes dumping in the U.S. unlikely.
Meanwhile, steel industry representatives are pushing for SIMA's continuation, and more than 70 congressional lawmakers agree with the steelmakers. Rep. Pete Visclosky, D-Ind., is leading the charge and said he intends to push to make monitoring permanent so the effects of foreign steel would be fully understood.
"Monitoring is critical to the long-term health of the domestic steel industry and shame on us if we allow these programs to expire," Visclosky said.
PMA supports the continuation of the monitoring program, but only if it does not become a mechanism for restricting imports and if the program's focus is expanded to include the net supply of steel available in the U.S.
PMA's position comes at a time when metal formers and fabricators are struggling with rising steel costs and a tight supply. PMA President William Gaskin said U.S. prices for flat-rolled steel are $100 to $200 per ton higher than other countries', and PMA's September Steel Report revealed that 73 percent of those surveyed received partial steel shipments and 89 percent experienced late shipments.
Steel imports aren't helping to alleviate the situation. Even though the American Iron and Steel Institute reported that steel imports during August and September reached their highest levels in four years, Gaskin said that hot- and cold-rolled sheet imports are still 36 percent below 2000 levels.
That's why PMA wants a monitoring program that provides a complete look at the market: domestic shipments and exports, as well as imports of steel. According to comments made in a letter addressed to Kelly Parkhill, the Commerce Department's director for industry support and analysis, PMA officials believe that exports must be reported in a manner comparable to import monitoring, so steel consumers involved in metal forming and fabricating are able to identify the "net" available steel in the U.S. market.
In the same letter, PMA officials stressed the importance of import licensing not becoming a method to restrict imports or increase their cost. With that in mind, the metal forming association came out against expansion of the import licensing program. The Commerce Department Web site (ia.ita.doc.gov/steel/license/faq.html) notes that the average number of steel license applications under the current system is 4,735 per week, and that's only for a small number of steel product imports subject to SIMA. PMA fears an expansion would drive the monitoring program's cost up dramatically.
The commentary period ended Sept. 24, 2004. SIMA is set to expire March 5.