An International Trade Case Could Threaten Jobs In Rural Texas

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Earlier this week in Lone Star, in the heart of the East Texas Oil Fields, nearly 1,000 people gathered outside a U.S. Steel facility to voice their opinions on a trade case that will be decided in Washington, DC.

That’s significant. In a community the size of Lone Star, 1,000 people means more than half of the town showed up. But such a crowd is understandable when you consider the stakes: The decision on that aforementioned case – to be meted out by trade commissioners at the U.S. Department of Commerce next month – could have a serious effect on the economy in Morris County, Texas and half a dozen surrounding rural communities.  

But to answer why, we have to first consider the growth of America’s domestic energy industry – and whether it will achieve the full economic potential of which it’s capable.

More below the jump.

Its full economic potential would include the steelworkers in Lone  Star. They make the pipe and tube products called oil country tubular  goods (OCTG) that are used in the extraction of oil and natural gas. In  effect, they’re doing what our country should have done before embarking  on the last decade’s foreign policy adventures in the Middle East that  cost too many lives; they’re building the infrastructure that will allow  America to become more energy independent.  

Or, at least, they should be. Instead they’re being crowded out of their own market by heavily subsidized OCTG steel from South Korea,  whose steel industry makes pipe strictly for export. Despite global  overcapacity in the steel industry following the global recession, South Korean companies actually upped production between 2010 and 2012.  And a full 90 percent of their OCTG exports come to the U.S., seeking  to take advantage of the demand generated by our booming energy  industry. According to domestic steelmakers, the United Steelworkers  union, and trade experts, it comes here priced far below fair market  value. A steady flow of government subsidies, after all, can give a  business a wide range of price points among which to operate.

This unfair pricing – called dumping – spurred a trade complaint from domestic steelmakers to the powers that be in Washington. The complaint asked that they enforce America's on-the-books trade laws, which are supposed to kick in when foreign industries unfairly compete in the U.S. market.

But  despite overwhelming evidence of bad faith trade behavior from South  Korean steelmakers, the Department of Commerce gave them a pass in a  preliminary ruling in February. What happened? The domestic steel  industry immediately cut capacity – and the corresponding jobs, too.  

In  fact, on Monday, just as Lone Star’s workers were rallying to save  their industry and their jobs, it was announced their employer, U.S.  Steel, was idling two other mills  – one in Belleville, Texas – in response to pressure that uncompetitive  imports have placed on its bottom line. A total of 260 American workers  will be out of their jobs by August, unless Commerce reverses its  decision.

While the situation may be growing more dire, it has already proven capable of bridging significant political gaps.  Nearly 60 U.S. senators, led by rock-ribbed conservative Jeff Sessions  of Alabama and liberal lion Sherrod Brown of Ohio, have signed a letter  that asks the Department of Commerce to fully enforce our trade laws.  

Still, with literally thousands of steel jobs at risk in Texas, neither  John Cornyn nor Ted Cruz have voiced their support for their  constituents’ cause.

Which brings us back to the massive rally in tiny Lone Star.  

Community  members – college students, local business owners, local city  councilors, and steelworkers, too – took the stage to voice their  concern that unless Washington gets this trade case right, their own  jobs could be next.  

I was proud to be up there with them. But from my vantage point, it was far more gratifying to see an entire community  turn out in support. They weren’t there to throw their weight behind a  partisan political attack. They were there because they understand the  underpinning of their economy – a local employer that provides hundreds  of middle-class jobs, and whose suppliers and service providers provide  hundreds more – is facing a dire threat that won’t go away unless we demand Washington enforce the level playing field our trade laws guarantee.  

Up on stage, Chad Wilson, a steelworker from Hughes Springs (population: 1,735) clarified why he was there that day.  

“This is not a political fight,” Wilson said. "I’m not interested in a political fight. I’m fighting for my job.”  

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