Steel Service Center Institute
November 13, 1998

Mr. Robert S. LaRussa
Assistant Secretary for Import Administration
Dockets Center - Room 1870
U.S. Department of Commerce
Pennsylvania Avenue & 14th Street, N.W.
Washington, D.C. 20230

RE: The Department's Proposed Policy Clarification Concerning Assessment Of Antidumping Duties Where A 'Reseller' Has Been Involved In The Chain Of Commerce For The Merchandise (63 Fed.Reg., Vol. 199 at pages 55361-64)

Dear Mr. LaRussa:

On behalf of the 400 U.S. and Canadian service center members of the Steel Service Center Institute (SSCI), we are writing to express our strong opposition to the Department's proposed policy on the assessment of antidumping duties for 'resellers.' The proposed change in policy is without justification and unfairly singles out service centers for unduly harsh and discriminatory treatment under the antidumping law. Indeed, the proposed policy reversal represents a severe blow to service center trade, particularly within the North American Free Trade Area.

As you know, SSCI is a North American trade association representing the steel service center industry with current sales of about $40 billion. Our member companies, a majority of which are small independent businesses, supply the metal requirements of an estimated 350,000 end-users in virtually all segments of the U.S. and Canadian economies. Their customers, in turn, transform steel into thousands of intermediate and final products for sale both here and abroad. Through more than 1,200 locations and with an aggregate workforce of nearly 110,000, steel service centers buy, stock (inventory), process, and deliver -- often on a just-in-time basis -- industrial steel products to downstream metal users.

The legal case against the adoption of the proposed policy is set forth in detail in the attachment to this letter and the enclosed diskette. Certain member companies have already suffered substantial losses -- totaling hundreds of thousands of dollars -- of deposit refunds they had expected as a result of recent administrative reviews. Now, their very livelihood is threatened by the Department's proposal; the imposition of high duties based on the "all other rate" will effectively choke off the trade they have worked for years and decades to build. The damage will not be confined to our members who ship steel across the U.S-Canada border. Rather, American steel-using manufacturers and final customers will lose a vital -- sometimes their only -- source of supply.

Letter to Mr. Robert S. LaRussa

November 13, 1998 - Page Two

The Department seems to have presumed that service centers could easily obtain their own antidumping rates through the usual questionnaire process. We know this to be untrue and have discussed these concerns with your staff in the past. The recent experience of one of our Canadian members demonstrates the impossibility of meeting the Department's data demands, even in a case involving a handful of export transactions. For those members who have a large number of small volume and small value export sales (much like the one that met with your staff last summer at your invitation), the proposed policy is punitive. Thus, our members will in effect be denied any means of escaping the prohibitively high "all other rate."

For these reasons, we ask the Department to reconsider the proposed policy and, instead, develop reasonable and workable procedures to enable resellers to obtain their own rate.

Finally, we wish to point out that, although this policy would have its principal immediate impact on our members, its reach is obviously much broader. Any reseller of any product from any country currently or potentially under antidumping order faces the same fatal threat. Before any such irreparable damage is inflicted, the Department should reverse this policy change and establish clear rules to permit fair competition among all exporters, whether or not they are manufacturers.

Given the high stakes for our industry, we appreciate this opportunity to submit comments and urge the Department to weigh carefully the interests of small companies to permit their continued participation in the American market on fair and equitable terms. We also thank you for agreeing to include a rebuttal period in connection with this important matter.

Sincerely,

Robert J. Carragher

Robert J. Carragher

Vice President - Governmental Affairs

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