We believe Section 201 is the appropriate remedy for our situation for four reasons:

First, we believe that we meet the law?s threshold of "serious injury." Over the last five years and especially in the last 18 months, imports of steel wire rod have devastated our industry. Imports have increased more than 60 percent since 1993, capturing a growing percentage of the market and causing a collapse of prices. The onslaught of low-priced imports -- now accounting for over one-third of U.S. consumption -- has seriously harmed the U.S. industry. The industry as a whole has not made a profit for three consecutive years now. Despite modern facilities and excellent productivity (worker hours per ton are among the lowest in the industry worldwide), the wire rod industry's financial results have fallen significantly below the average performance of the U.S. steel industry.

At my own company, the import pressure has forced us to reduce shifts in our melt shop and rolling mill, and on December 1^st of last year we permanently eliminated 75 jobs -- or 15% of our management and hourly workforce -- the first layoffs in our history. In 1998, import pressures also led us to cancel plans to raise our mill's capacity to 1.1 million tons -- a 25 percent increase that would have enabled us to serve our customers better.

Let there be no mistake about the level of serious injury the wire rod producers are now suffering. The sea of red ink has led to production shutdowns, delayed or abandoned investment, and laid-off or unemployed workers throughout the industry.

We recognize that the Administration has reached an agreement with Russia to limit steel exports to the United States, including wire rod. However, the agreement does not appreciably affect our situation. The decrease in Russian steel imports is more than offset by increases from non-traditional suppliers like India, Indonesia, South Africa and Moldova. Indonesian imports alone went from zero in 1997 to a level nearly five times that of Russia in 1998.

Second, the Section 201 approach is a flexible approach to a serious problem that can be remedied while taking into account the impact on customers and the U.S. economy. The President, after receiving the recommendations of the ITC, can fashion a remedy to meet specific needs. The 201 remedy is particularly suitable in this case where more than 20 countries export wire rod to the United States. Wire rod mills are found all over the world, and there are additional foreign suppliers who are undoubtedly targeting this market as I speak. Adverse conditions abroad and measures taken in a number of countries to protect their home markets make the United States the export destination of choice. Moreover, the Section 201 remedy may be molded in appropriate circumstances to accommodate the supply and product needs of wire rod customers. For example, it can reflect the existence of a more integrated North American market so that imports from Canada and Mexico, as NAFTA countries, can continue flowing as normal into the U.S. market. On the other hand, non-traditional suppliers who have flooded the market with low-priced imports can be dealt with decisively.

Third, the Section 201 approach is appropriate because, as our lawyers emphasize, it is fully consistent with the international obligations of the United States. Those obligations require that safeguard actions conform to GATT 1994, in particular Article XIX, and the World Trade Organization agreement implementing that Article. So what we are seeking is a remedy that is consistent with our international trade rules, and one that must gradually phase down during the adjustment period.

Finally, use of Section 201 is appropriate at this time in our nation's economic history when inflationary pressures are in check. As Federal Reserve Chairman Alan Greenspan said just this week, ". . . recent experience does seem to suggest that the economy has become less inflation prone than in the past, so that the chances of an inflationary breakout arguably are, at least for now, less than they would have been under similar conditions in earlier cycles. . ." Other economic observers note that our economy is flexible and resilient, currently reaping the benefits of productivity increases from years of technological investments, of decades of deregulation, of advances in telecommunications and distribution, and cheap energy costs. This makes it a particularly opportune time for the ITC to recommend, and for the President to impose, safeguard remedies without risking any significant inflationary impact on the overall U.S. economy.

Mr. Chairman, so far I have only referred to existing law and I know you're interested in our views on the bills pending before this Committee. We decided months ago to file our Section 201 petition under current law because we believe that the dismal conditions in our industry fit the injury criteria of the law. If you insist on my providing specific recommendations on the proposed legislation, then I would ask for your indulgence -- let me tell you what I think after July 12^th when the ITC must make a final decision on our petition. If Section 201 remedies are not recommended in our situation, then I may be back before this Committee very quickly asking for changes in law because if we're not "seriously injured," I don't know who is.

Later this morning, you will hear from our customers in the wire products industry, who plan to oppose our Section 201 petition before the ITC. We had hoped that our customers would understand our predicament. We had many candid discussions with the American Wire Producers Association ("AWPA") leadership about our plans to file a petition. We made clear our intention to work with them to achieve a remedy that would alleviate the wretched financial condition of the rod producers, yet take into account the interests of the rod consumer. We made a number of adjustments to accommodate the wire industry:

• We acknowledged customer needs and excluded certain products from our petition such as wire rod for tire cord, valve spring wire, and pipe wrap;
• We will not request that imports from Canada and Mexico be covered by any remedy;
• We have agreed to work with the wire producers to find appropriate ways to avert any possible downstreaming if relief is granted on wire rod; and

• We proposed to work with the wire producers as we develop the specific remedy plan.

Having taken these steps, and made these commitments, we are sorry that the AWPA has elected to oppose the petition. At the same time, we understand that the AWPA door "is still open" to us. For our part, we are prepared to continue the dialogue and will follow through with our commitment to work with the AWPA throughout the process.

The wire rod industry needs a remedy that will enable it to climb out of a sea of red ink and to resume making the kind of investments that will maintain state-of-the-art facilities. A rod industry that defers investments, shutters capacity, and is financially weakened is not in the long-term interest of the U.S. wire producers and the U.S. economy as a whole. The flexibility of Section 201 will permit the President to fashion a remedy that accommodates the interests of both producer and consumer. As the President's Steel Plan notes, Section 201 is a legitimate and essential tool for addressing the type of world conditions we now face.

In conclusion, Mr. Chairman, we believe the existing trade laws are designed to address the flood of imports that the steel industry is facing. In the case of the wire rod sector, we have set out to put those safeguards to the test to determine if they will live up to Congress' design. We hope that you and the Members of this Committee will support us in this effort. Thank you.