201 Case for Steel -forward to Steel Group

I continued meeting with USG officials on 201. Today I met with Faryar
Shirzad, Dept. of Commerce Assistant Secretary for Import Administration.
Faryar is a friend from his days in the Senate.

Faryar again said that the interagency working group is philosophically
opposed to a 201 as a simple political solution and they are looking for
alternative approaches. However, he noted that the industry is in crisis
(not from imports alone) and they want to seek long-term solution. It was my
sense that, unlike Competitive Analysis memo, the Administration is no longer
relying on a 201 to secure support for Trade Promotion Authority (TPA).
Faryar reported that a 201 decision is several weeks away, but will made by
early summer. The steel industry continues to push the Administration,
because they believe an Administration initiation carries more weight and
will more likely result in quotas.

The Senate Finance Committee Chair has said that July is "trade" month for
his committee, so the Administration may want to announce their intentions
before then. The Senate Finance Committee Chairman Grassley (R-IA)said that
he was "reluctant" to vote on 201 in his Committee and said the steel
industry should work with the Administration or file its own private
action. This has not stopped Sen. John Rockefeller (D-WV) from encouraging
Finance Committee action.

The Administration could potentially initiate a 201 investigation and if harm
is found they can seek quotas or other alternative. As noted above the
Administration is looking to the alternative, one is that the industry would
be forced to restructure (this is the gamble that steel is willing to take).
To that end, here are two action items:

1) The Administration is looking a long-term structural change to the US
domestic steel industry and they asked for consuming industry ideas on legacy
cost, market restructuring (i.e. efficiency), and global competitiveness. If
the steel group has any ideas that we could turn into a document for
Administration use it would allow us to offer solutions and encourage other
alternative courses of action.
2) After we review possible solutions we can offer, Ken, Jeff, or Steve
should make the calls to senior Administration officials (within the next two
weeks).

I will continue to monitor Administration and Congressional action.