Barletta Testifies about Anthracite Coal at USTR-Commerce Public Hearing on Trade

May 18, 2017
Press Release
Highlights Importance of Protecting U.S. Coal Industry from Unfair Trade Practices

Barletta testifying at the public hearing on trade deficits.

 

WASHINGTON Congressman Lou Barletta (PA-11) today testified in front of officials from the Office of the United States Trade Representative (USTR), Small Business Administration, Department of Commerce, Department of Treasury, Department of State, and United States Agency for International Development during a hearing on trade deficits.  Barletta discussed the impact of international trade abuse on the anthracite coal industry and urged the administration to take steps to protect the industry from unfair trade practices.

Commerce Secretary Wilbur Ross started the hearing by introducing Barletta, who was the only member of Congress to testify.

“As a lifelong resident of northeast Pennsylvania, I have witnessed the devastating effects that the decline of the anthracite coal industry has had on our local communities,” Barletta said.  “Like many U.S. industries, coal has fallen victim to unfair and predatory trade practices by a few foreign nations.  I commend the administration for looking at ways to address this problem and protect American workers who rely, both directly and indirectly, on the coal industry for their livelihoods.”

The hearing was related to an executive order President Donald J. Trump signed on March 31, 2017, directing the administration to conduct a report on the factors behind our nation’s trade deficit.

Anthracite coal has been mined commercially in northeastern Pennsylvania for more than 150 years.  Anthracite is used in various industries, including steel and charcoal manufacturing, and provides heating in homes, schools, hospitals, office buildings, and military bases.  It contains the highest energy content of all coal, meaning it burns cleaner and hotter than the other types present throughout the United States.

Many foreign governments prop-up their coal industries with subsidies and price supports, allowing them to sell their coal at a price below market value and putting American anthracite at a disadvantage. 

Barletta noted that, in 2014, state support for the Ukrainian government provided its coal industry with $600 million in subsidies and price supports.  Due in part to these artificially suppressed prices and the influx of cheap, foreign coal, many American mines closed and jobs were lost.

Moreover, foreign nations often circumvent sanctions meant to stop unfair trade practices by moving their goods through third-party companies that have trade agreements with the U.S.  For instance, last year, Switzerland shipped roughly 37,000 tons of anthracite to the U.S. – despite the fact that Switzerland has no known anthracite reserves.

“It is crucial that once duties are put in place to address unfair trade practices, the administration remains vigilant in ensuring that those duties are enforced,” Barletta said.

Barletta also pointed to the high cost of U.S. companies pursuing trade remedy cases and urged the administration to take this into account as it decides how to address trade deficits and unfair trade practices.

Barletta’s testimony can be found below:

Thank you for the opportunity to appear before you today.  I am pleased that President Trump has recognized the need to address unfair trade practices that are hurting U.S. industry and U.S. workers.

I would like to speak about anthracite coal, more commonly known as hard coal.  Anthracite, which is used in various industrial applications, including steel and charcoal manufacturing, has the highest energy content of all coal, meaning it burns cleaner and hotter than the other types present throughout the United States.

Although it accounts for a small portion of total domestic coal production, anthracite’s industrial value makes it a critical component in our national energy portfolio.  Further, as the president recently acknowledged, steel is directly tied to our national security.  Given anthracite’s unique role in steel production, it is no stretch to say that our ability to produce this coal is critical to protecting our homeland.

Anthracite has been mined commercially in Northeastern Pennsylvania for more than 150 years.  As a lifelong resident of the region, I have seen the decline of this industry firsthand, and have witnessed the devastating effects that this has had on the local communities that rely – both directly and indirectly – on this industry for their livelihoods.  While anthracite coal reserves in Pennsylvania are among some of the largest in the world, last year, production of U.S. anthracite accounted for just 1.75 percent of the world’s consumption. 

So why is it that the American anthracite industry, despite having such abundant reserves, is not leading the globe in production?  There are several factors at play.

First, like many industries, anthracite coal producers are the victims of unfair and predatory trade practices by a few nations.  For example, according to reports, in 2014, state support for the Ukrainian coal industry amounted to $600 million.  The subsidies and price supports given to Ukrainian coal companies at that time had a significant impact on domestic anthracite producers.  In the wake of artificially suppressed prices, we saw the closure of mines and the loss of good-paying American jobs.  For those mines that managed to survive this influx of foreign coal, most operators were unable to hire new workers and invest in new equipment.  I hope this administration will immediately take action to address such unfair practices and ensure that American anthracite producers are able to compete on an even playing field.

Second, even when sanctions to prevent cheating are in place, foreign nations find ways to circumvent the rules by moving their goods through third party companies located in countries that have trade agreements with the U.S.  We know that last year, roughly 37,000 tons of anthracite were shipped to the U.S. from Switzerland.  This is suspicious because Switzerland has no known anthracite reserves.  Europe’s largest supply of anthracite is located in the disputed territory of Crimea, Ukraine and Russia.  Clearly, something is going on behind the scenes.  It is therefore crucial that once duties are put in place to address unfair trade practices, the administration remains vigilant in ensuring those duties are enforced.

Lastly, as a member of Congress, one of the things I consistently hear from businesses back home is about how difficult it is to initiate a trade remedy case.  Most of the people I represent don’t have the spare time or the millions of dollars for the legal expertise necessary to pursue such a case.  For these Americans, putting up with foreign cheating is a way of life.  And unfortunately, it’s the reason many of these family-owned businesses end up closing their doors.

The anthracite industry is no different.  Many of the operations in my district have been owned by families for generations.  They take pride in ensuring their employees have a good living – the average miner wage is 50,000 dollars plus benefits – and they put any money that is left over back into their businesses.  Hard-working Americans simply cannot afford to pursue cases against Ukraine or other foreign governments.  I hope that the administration will take this into account as they look at ways to address our trade deficits and unfair trade practices.

Again, thank you for the opportunity to testify before you today.  I look forward to working with the administration to address these issues so that we can provide relief for the American anthracite industry.

 

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