Good morning Mr. Chairman and members of the Congressional Steel Caucus. My name is Bill Pendleton and I am the Director of Corporate Affairs for Carpenter Technology Corporation, a specialty metals manufacturer headquartered in Reading, Pennsylvania. I am appearing today on behalf of the Specialty Steel Industry of North America.

We are a world-competitive industry facing an import problem based solely on unfair trade. My industry has long been recognized as extremely modern and efficient -- second to none in the world. We have a long history of continuous investment in plant and equipment. Our basic responsibility to our shareholders and employees requires that we file antidumping and countervailing duty suits to seek the restoration of fair pricing for our products in the U.S. market. Maintaining and strengthening these important laws is a major priority for our industry.

I would like to bring to your attention a recent press release that graphically illustrates why the Congress and the Administration must not give one inch on the issue of opening up U.S. antidumping and countervailing duty laws for negotiation during the upcoming WTO Seattle Round. The headline reads "IFC Offers Loan to China Steel Venture". Apparently, the World Bank's International Finance Corporation has decided that there is just not enough stainless steel available in the world today, so it has announced a $100 million loan to a joint venture between Krupp Thyssen - the world's largest stainless producer -- and Shanghai Pudong Steel to build a $1.4 billion fully integrated stainless steel plant in Shanghai. It gets worse. The German development agency KfW is co-financing the venture with an additional $78.8 million loan. I hope I'm not the only person who is outraged that the World Bank and the German government are loaning nearly $200 million to finance a new stainless steel plant in China? I urge you to ask the same questions of our U.S. representatives at the World Bank.

Status of Trade Cases
The specialty steel industry has filed and won many trade cases since mid-1997. Although we are pleased to have won these cases, positive results in terms of fair prices in our markets are very often painfully slow to materialize. We have seen some foreign producers disregard the orders and duties and continue to price their products in a manner to maintain market share.

A good example of this is stainless rod on which we filed a trade case in July, 1997. More than two years later, we still see unfair pricing by foreign producers. This delay in results is compounded by the agonizingly slow timetable prescribed by U.S. trade law in adjudicating cases -- still with no redress for past injury to the industry and our workers. There are some pending legislative proposals addressing this very issue which I will discuss in a few moments.

Import Data, Trends and Impact
Although the absolute volume of specialty steel imports have declined since last year, the steel import crisis is certainly not over. There are three reasons for this: First, while the absolute amounts of imports have declined, import penetration has remained essentially constant for each of the products and in total. Thus, the negative pricing and profit impact continues in a down market. Second, for some products, such as stainless bar, the effects of current imports are compounded by the residual effect of imports which came into the U.S. last year, but were kept in distribution inventories and have been entering into our markets this year. The third factor is the agonizingly slow administrative process coupled with the often extensive time required to realize the protective effects of successful trade cases. We can categorically say that the import crisis is definitely not over.

President Clinton's Steel Action Plan
SSINA has followed with great interest the developing Steel Action Plan and we are encouraged with Secretary Daley's strong statements that the Administration will continue to vigorously enforce U.S. trade laws. The President's program addresses certain key areas of both short and long-term concern to the specialty steel industry -- specifically focusing on the elimination of unfair trade practices that support excess production capacity.

We also support the improvements proposed to the 'early warning' system and the national and international steel trade conferences that may develop long-term solutions to the cyclical steel trade problems. We look forward to working closely with the caucus and the Administration to insure that the major objectives of the Steel Action Plan are met.

Pending Legislative Proposals
SSINA strongly supports the efforts of many Members of the Congressional Steel Caucus and the Senate Steel Caucus who have proposed much needed reforms to our trade laws. In particular, SSINA supports H.R. 1505 introduced by Rep. Phil English and cosponsorsed by many members of the Caucus. This legislation will make critical improvements to our existing trade laws of a long term nature in a fully WTO-consistent manner.

We commend Representatives Visclosky and Ney for the introduction of the "MUST" Resolution. SSINA also strongly supports Senator Specter's private right of action legislation; Representative Levin and Houghton's bill that makes important changes to our safeguard laws; and Congressmen Regula's legislation that would provide compensation to companies and workers injured by unfair trade. We look forward to working with the Congress and Administration to move these important legislative initiatives as soon as possible.

WTO Objectives
SSINA strongly opposes any reopening of the WTO's Antidumping Agreement and the Agreement on Subsidies and Countervailing Measures. We are a signatory to a letter sent last week to President Clinton by a majority of American steel industry CEO's and the USWA urging the Administration to resist all efforts by our foreign trading partners to reopen the existing WTO rules against unfair trade.

In conclusion, Mr. Chairman, SSINA wishes to thank all the members of the caucus for your tremendous efforts on behalf of the steel industry. I will be happy to answer any questions you may have.