· As a matter of survival, service centers must protect the value of their inventory. Inventories comprise roughly half of the assets for the average service center. A sudden or sharp loss of inventory value can be devastating for a service center and can easily threaten its continued existence as an independent company.

· Service centers require continuity of supply of steel products at prices that will keep our customers competitive, both at home and when competing in the global economy. Our mission as an industry is to supply our customers with the quantity and quality of the steel they need, when they need it, at a price that permits them to meet the challenges arising from imported goods and competing materials.

· Service centers should advocate a public policy that guarantees the continuity of supply. In a unique way, the long-term prosperity of the service center industry depends on the success of both our domestic suppliers and our customers. We do not wish to see either prosper at the expense of a vital interest of the other. At the same time, an adequate supply of the products we sell may require a certain quantity of imports, as installed domestic capacity may not be able to meet the levels of demand we have experienced in this decade. This particularly holds true for products that are not produced domestically or are produced in limited quantities.

· Support the rule of law as the best means to limit protectionism and to promote the orderly growth of international trade on terms that are fair and mutually beneficial. We fully support the letter and spirit of World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) rules.

· Support the right of U.S. producers to secure effective relief from injurious dumping and subsidization. The U.S. unfair trade laws are designed to offset the unfair advantage that derives from dumping or subsidization, thereby permitting trade to continue freely on a fair basis. The unfair trade laws should operate transparently, be accessible to all manufacturers, producers, processors, distributors and industrial users of a domestic like product and should not impose unreasonable costs or burdens on any party.

· In the application of any trade law remedy, the government should establish the objective of guaranteeing the continuity of supply for downstream industrial users and provide a timely and effective means for relieving shortages. MSCI has long championed for the inclusion of a 'short supply' provision in U.S. unfair trade law that would operate in a timely, transparent, targeted, temporary and tested fashion. The same principles should be applied to measures taken under other statutes.

· Maintain a neutral position as an industry on specific cases brought under the unfair trade laws. Individual service centers are free to support or oppose any case, provided that they make the disclaimer that they speak for themselves only, not for the industry as a whole. However, staff is authorized to respond to requests from government agencies for published factual information about our industry.

· Work for policies and practices that respect and enhance the integrated nature of the North American market. MSCI itself is the product of the integration of the Canadian and U.S. service center associations. Our industry has prospered in part because of the growth in cross-border trade that was fostered by NAFTA. Moreover, customers throughout North America require just-in-time delivery. Our future prosperity depends, therefore, on our members' ability to deliver steel within North America without any undue delay or administrative burden.

· Work for policies and practices that protect established supply relationships from unnecessary disruption. Service centers and their customers' work for years to qualify reliable suppliers of the specific products they require. Without weakening the effectiveness of the trade laws, ways should be found to ensure the continuity of this source of supply.

· Encourage the development of a long-term strategy to deal with the sources of disruptive imports. The countries of the former Soviet Union and China are undergoing a fundamental transformation. The faster and more complete their conversion into market-based private competitors, the better. Throughout the world, the threat of rapid changes in currency values has created a new element of instability in steel trade. Thus far, the governments have been slow to develop effective responses to manage the disruptive effects of exchange rate gyrations.

· In the meantime, work with the government to devise a system as an early warning signal for import surges and other problems. The government should develop a set of tools by which it could take timely action to avert and contain problems before they reach the critical stage. These tools could arise from multilateral and bilateral agreements as well as national policy and programs.

· Oppose all quota bills. They are apt to unduly restrict supply of needed steel, to introduce rigidities and distortions in the market place, and thus to hinder the continuity of supply to our customers. They also violate the letter and the spirit of the WTO, even if they might be termed "voluntary."

· Support judicious changes in Section 201 to permit a more rapid and effective response to import surges. Provided the changes respect the letter and spirit of the WTO rules and make due provision for a short supply relief mechanism, a more streamlined 201 process could be the most effective means of protecting the value of our members' inventories.

· Oppose major changes to the antidumping (AD)/countervailing duty (CVD) statutes. Over the years, they have grown progressively more complex, cumbersome and costly. These burdens in themselves sometimes constitute trade barriers. The best course would be for the U.S. International Trade Commission and the Department of Commerce to ensure a proper balance between the rights and interests of petitioners and downstream product users.

· If the AD/CVD laws are opened up for revision, promote changes that would ensure a better balance of the interests of petitioners and downstream product users. Among the possible changes that would promote a fairer system without undermining the effectiveness of the unfair trade remedies are: granting 'interested party' status to processors and industrial users of the product; a public interest clause; a lesser-duty rule; eliminating the current system of annual administrative reviews and retrospective duty assessment; and adoption of a timely, effective and workable short-supply provision.