Obviously, we feel that that is simply not the case because what we have here is domestic industries being injured, taking advantage of existing U.S. legislation to protect their interests.

Senator MATHIAS. Of course, you can recall from your previous experience here that we have never lacked for statements from the Justice Department on this subject. I sat through a good many hearings on the television case a couple of years ago which has already been mentioned.

Mr. HARTQUIST. Yes.

Senator MATHIAS. We had some very fine statements made at that time. But they always were prospective about what would happen. But, about what was going to be done, not what had been done, what had happened. That tends to wear a little thin after a while.

Mr. HARTQUIST. Yes, indeed. That is why we feel that this kind of legislation is so desirable.

Mr. CHUMBRIS. Your question I take it was to the Attorney General, as well, at his nomination hearing, at that time.

Senator MATHIAS. Yes.

Mr. CHUMBRIS. To look into that issue.

Senator MATHIAS. I believe you are correct. That was one of the issues raised with the Attorney General at the time he was confirmed. Mr. CHUMBRIS. Mr. Bell.

Senator MATHIAS. Well, this, of course, is a continuation of that interest and a means of providing a practical spur to action which we have not been able to achieve by other means up to this time from 1916 to this present time, more than 60 years.

Does counsel have questions?

Mr. CHUMBRIS. No, thank you.

Mr. COOPER. No.

Senator MATHIAS. Thank you very much, Mr. Hartquist.
Mr. HARTQUIST. Thank you, Mr. Chairman.

[The prepared statement of Mr. Hartquist follows:]

PREPARED STATEMENT OF DAVID A. HARTQUIST

Mr. Chairman and members of the Subcommittee: I am David A. Hartquist, counsel to the Tool and Stainless Steel Industry Committee (TSSIC) and a partner in Collier, Shannon, Rill, Edwards & Scott. I sincerely appreciate the invitation to testify before you on S. 938, the Unfair Foreign Competition Act of 1979.

TSSIC is a trade association composed of the American producers of tool and stainless steel products, commonly known as the specialty steel industry. Most specialty steel producers are smaller companies in comparison with the carbon steel companies. The tool and stainless steel products we produce are generally high-value materials used for a wide range of industrial and military applications, including energy production, transportation, communications, jet aircraft, surgical instruments, and food processing.

At the outset Mr. Chairman, let me say that the U.S. specialty steel industry is modern and efficient-it can compete favorably with foreign producers given fair competitive conditions. We are not "protectionist." We do strongly support vigorous enforcement of our laws against unfair trade practices.

TSSIC STRONGLY SUPPORTS S. 938

Mr. Chairman, I can state our position on this important legislation in three short words: "We're for it." The primary reasons why the specialty steel industry supports this legislation are as follows:

1. It is timely. Many of the members of this Subcommittee are aware that the current quotas on specialty steel imports expire on February 13, 1980, despite our efforts to get an extension of the Import Relief Program for another three years. In that effort, I should add, we were strongly supported by the sponsor of S. 938, Senator Mathias, and other members of this Subcommittee, including Senators Bayh and Thurmond. It is clear to us that unfair trade practices will continue in the specialty steel area, and we will need effective tools to deal with this problem.

2. The Antidumping Act in the past has been inadequate to deter dumping. For example, TSSIC members won two antidumping cases several years ago one against Swedish stainless plate in 1973, and a second against French stainless wire rods the same year. Yet, to our knowledge, not one cent in antidumping duties has been collected. Treasury could not even tell us how much was due. We think dumping has continued periodically since the original findings in these cases. We have initiated procedures under Section 516 of the Antidumping Act to force collection of duties by the government, but we have encountered various apparent stalling tactics by Treasury, including being told that both our filings were somehow "lost."

Without getting into all of the details of our frustrations, my point is that the law has not been enforced, therefore has not had a deterrent effect on dumping.

The Antidumping Act, as you know, was amended by Congress last summer. The law has been strengthened, and under the President's reorganization plan, jurisdiction will be transferred to the Department of Commerce shortly. We hope for a more effective enforcement of this law.

Nevertheless, the Mathias bill would allow U.S. industries and Labor to take action on their own if necessary to prevent dumping.

3. I am personally very familiar with this legislation, having worked with an American Iron and Steel Task Force last year which developed a similar proposal. TSSIC strongly endorsed that proposal, and we are delighted that this Subcommittee is actively considering S. 938 now.

REASONS WHY S. 938 SHOULD BE ENACTED

In addition to the policy reasons for our support of S. 938, TSSIC believes this legislation will substantially improve the effectiveness of the Revenue Act of 1916, for the following reasons:

1. The 1916 Act has not been an effective tool, for over 60 years. As you may know, Mr. Chairman, this statute is currently being subjected to an important test in a massive antidumping case brought by Zenith Radio Corporation against Japanese television producers. This litigation will help show the effectiveness of the current law.

Regardless of the outcome of the Zenith case, however, we believe the Unfair Foreign Competition Act of 1979 will considerably strengthen and clarify the 1916 Act.

2. Failure to include the provisions of the 1916 Act within the scope of the antitrust laws was a legislative oversight.

The restraint of trade and monopolization language, along with the trebledamage provision of the 1916 Act were copied from the original Sherman Act two years after passage of the original Clayton Act. The 1916 Act was, we believe, intended to be part of the antitrust laws. The 1916 Act condemns a predatory commercial practice which is injurious to competition. The law was intended to provide a criminal sanction as well as a civil remedy. We believe that failure to have included as an antitrust statute within Section 1 of the Clayton Act was simply a legislative oversight.

In order to correct that oversight, the 1916 law would be amended by the Mathias bill by providing that the 1916 Act will be one of the antitrust laws defined in Section 1 of the Clayton Act, and will therefore be subject to the important remedial provisions of Sections 4, 4B, 5, 15 and 16 of the Clayton Act. S. 938 would thus provide both the United States Government and injured private parties a remedy of injunctive relief which is not now available. In addition. this legislation would encourage private actions by making government judgments and decrees prima facie evidence of violations in private suits.

3. S. 938 would also amend the criminal sanctions by increasing the maximum fine to $50,000, consistent with the 1955 amendment to Section 1 of the Sherman Act and albeit somewhat modestly, with the inflationary trend in the economy.

4. The venue and discovery provisions of S. 938 are desirable in that they would further strengthen the effectiveness of the statute.

Mr. Chairman, this bill recognizes that dumping is a direct attack on fair 2 competition. It can be as destructive in the marketplace as any of the well-known violations of our antitrust laws. Senator Mathias represents within his constituteney Bethlehem Steel and Armco Steel, both members of TSSIC. He is well aware that this anticompetitive practice is directly responsible for the loss of jobs and deterioration of otherwise healthy and vigorous industries in this country. The specialty steel industry has been and will continue to be alert to unfair trade practices whenever and wherever they occur. Other industries, unfortunately, have been less aggressive and less successful in dealing with these problems. This legislation would correct a long-standing inadvertent legislative oversight and would have a positive deterrent effect. The specialty steel industry will do all it can to ensure passage of this important legislation.

Senator MATHIAS. I appreciate your statement and your presence here today.

The committee will stand in recess, subject to the call of the Chair. [Whereupon, at 11:38 a.m., the hearing adjourned, subject to the call of the Chair.]

APPENDIX

QUESTIONS OF SENATOR THURMOND AND RESPONSES OF MR. PATTERSON

Question. As we look at the steel industry of the United States from a national security viewpoint, would you explain for us the overall long-term outlook if we attempt to continue "business-as-usual" with other nations in the international trade area?

Answer. A continuation of present government policies affecting the domestic steel industry can only lead to increased dependence on foreign steel and a corresponding instability of supply which has obvious adverse implications for the ability of the domestic industry to satisfy our national defense requirements. If dumped and subsidized foreign steel is permitted to continue to have unrestrained and disruptive access to the U.S. market, the industry will not be able to justify the capital investment needed to preserve a modern and competitive domestic steel industry, and the involuntary liquidation of the industry that has been occurring in recent years will accelerate.

The national security implications of such a scenario must be considered not only in the context of mere availability of critical materials, but also in the context of the serious adverse impact on the economic health of the nation caused by excessive dependence on foreign sources of critical materials. The present situation with energy should not be permitted to spread to other critical materials. Question. You have indicated that you feel S. 938 "is a bill worthy of enactment." Yet, I seem to sense that you really feel we should develop and enact stronger and more clearly workable legislation if we are to obtain the response we need to protect our nation's industries from injurious dumping practices. Is my interpretation of your feeling correct and would you comment further regarding this matter?

Answer. I did not mean to imply that I was advocating a more radical solution to the dumping problem at this time. The Congress has been responsive to domestic industries' complaints about lax enforcement of the trade laws and has attempted to address that situation in the Trade Agreements Act of 1979. I personally believe that this Act should be tested before further radical changes in the dumping laws are advocated.

On the other hand, I do not believe that the amendments to the 1916 Act proposed in S. 938 are radical or counterproductive to the legislative effort resulting in the Trade Agreements Act of 1979. S. 938 is a responsible effort to improve the effectiveness of an existing statute that complements the Trade Agreements Act of 1979. Although there are obviously ways in which S. 938 could be modified to make private treble damage actions more attractive to domestic industries which are injured by dumping, I am reluctant to advocate changes which Would be likely to result in a major shift in antidumping enforcement from the Government to private litigants until the Government has been tried and proved wanting under the Trade Agreements Act of 1979 and the President's reorga nization plan.

QUESTION OF SENATOR THURMOND FOR MR. BARDEN

Mr. Barden, during some hearings conducted in May 1977, I had a most interesting discussion about imports with Assistant Secretary of the Treasury for International Affairs, Mr. Bergsten. He had discussed, as you have, a broad range of import policy situations. I am concerned, of course, with the overall exportimport situation for many reasons, not the least of which is the critical nature of our United States trade balance.

I have particular concerns, however, about textiles. While I am from a region that has a heavy concentration of textile employment and production, the problems of the textile industry are not problems of that region alone, they are problems of national concern.

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