Resolution: Steel Trade and the Great Lakes Region
Adopted on October 11, 2001

Whereas, the steel and related iron ore industries are a vital component of the Great Lakes binational region's durable goods manufacturing cluster and are important to the national economy and defense capabilities; and

Whereas, in recent years, the Great Lakes states have accounted for 70 percent of domestic steel production, almost all of the iron ore mining and taconite pellet production, and 50 percent of steel usage; and

Whereas, during the 1990s, rising levels of imported steel have caused an average of 5,000 steel-related jobs to disappear each year including the recent closure of LTV Steel Mining Company in Hoyt Lakes, Minnesota, where 1,400 skilled workers lost their jobs; and

Whereas, steel companies have been severely affected by the high level of steel imports resulting in 23 firms filing for bankruptcy since 1998, including LTV Steel, the third largest in the United States; and

Whereas, every ton of imported steel replaces 1.3 tons of domestically-mined iron ore, jeopardizing the iron ore mining ranges of Minnesota and Michigan, and the U.S.-Flag Great Lakes fleet that depends on iron ore for more than 50% of its total float; and

Whereas, if Michigan's Marquette Range and Minnesota's Mesabi Range were to close due to the steel import problem, the Upper Peninsula area and Northern Minnesota could lose more than US$1 billion dollars of economic activity, a serious blow to regions that need a more diversified economy, and

Whereas, steel imports now account for about 20 percent of the U.S. market and an apparent world oversupply has also held prices of steel down, putting pressure on even low-cost producers; and

Whereas, on June 22, 2001, the Bush Administration invoked Section 201 of the 1974 Trade Act launching a review of the steel import situation to determine if import increases have been substantial cause of serious injury to the domestic industry; and

Whereas, the U.S. Department of Commerce has conducted hearings in the Great Lakes states during the summer of 2001 on the steel import/industry issue and received much testimony about the seriousness of the current situation; and

Whereas, steel import levels have recently stabilized and even declined a little from recent past years trade policies of steel exporting countries and the global steel oversupply situation have not fundamentally changed.

Therefore, Be It Resolved, that the Great Lakes Commission urges the Bush Administration to maintain its vigilance regarding the current steel import situation and fully enforce U.S. trade laws; and

Be It Further Resolved, that the Commission, consistent with its previously developed steel policy, urges the federal government to:

1. Conclude a comprehensive, enforceable and effective Multilateral Steel Agreement (MSA) that would eliminate all subsidies and other unfair trade practices and market distortions in the steel sector, and preserve the ability of national industries to use national trade laws to address current unfair trade and deter future unfair trade distortions.
2. Pursue an active strategy to enhance export opportunities and reduce unfair and illegal import competition
• Where foreign trade barriers exist, link access to the U.S. market to reciprocal market openings for high-value U.S. steel products and steel-containing goods.
• Adopt an affirmative role in resolving the third world debt crisis.
3. Discourage international finance agencies and foreign governments from supporting construction of additional steel facilities while steel remains in oversupply worldwide.
4. Where appropriate, link access to the U.S. market to efforts in trade surplus countries to stimulate domestic demand.
5. Where appropriate, link access to the U.S. market to efforts by developing countries to raise labor standards, such as wages, benefits, and health and safety standards, in their export steel industries.
6. Make the establishment of comparable environmental standards for foreign industries which export to the United States a major goal of U.S. trade and foreign policy. This is particularly critical for world steel trade, in which U.S. steel companies compete with foreign companies subject to little or no environmental regulation.

Be It Finally Resolved, that the Commission urges its member states to develop or tailor existing adjustment assistance strategies to help workers and communities respond to and manage change flowing from the competitive realities facing the integrated steel industry.

Adopted unanimously at the 2001 Annual Meeting of the Great Lakes Commission, October 11.