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September 2004

Scrap Recycling Industry Offers to Support the Copper and Brass Manufacturers in the Search for Solutions

Washington— Two days after the Commerce Department’s decision to deny copper export controls, ISRI has restated its offer to work with the copper and brass industry for a more appropriate solution to that industry’s problems.

“From the very first position paper ISRI published on the copper and brass export control issue, we have acknowledged that the copper and brass industry faces serious challenges,” said ISRI President Robin Wiener. “But the problems they face are with foreign governments and not with American businesses. ISRI has been and continues to be interested in assisting the copper and brass industry in addressing any and all documented cases of unfair trade by any foreign country.”

Wiener took issue with the statement released by Copper and Brass Council President Joe Mayer. “Presuming ‘windfall profits’ within our industry shows a certain misunderstanding of the facts,” Wiener said. “Where was the copper and brass industry a few years ago, when our industry was struggling with record low prices for scrap — prices low enough to drive many scrap recyclers out of business? The cyclical nature of the scrap recycling industry brings good years and bad years. Only when you take the entire cycle into account does this industry approach the return-on-investment rates expected of U.S. businesses today.”

Wiener noted that Mayer’s lengthy comments concerning China highlight the real problems at issue. In his statement, Mayer said, “What the government repeatedly fails to grasp is that ‘free trade’ doesn’t exist in regimes such as China’s. China’s trade policy has only one goal: benefits for China as China defines them. China is not concerned that its actions will interfere with the operation of the ‘invisible hand’ to which the U.S. government defers. China doesn’t worry that interfering with the ‘invisible hand’ will distort the marketplace. China wants a distorted marketplace and they have found it in their trade with the U.S.”

“Clearly, the copper and brass industry has an issue with other countries, not with the U.S. scrap recycling industry,” Wiener said. “The industry’s attempt to use the Export Administration Act as a means of addressing those issues was the wrong venue and provided the wrong solution to the problem.

“American scrap recyclers are manufacturers — the same as those in the copper and brass industry, the electronics industry, the aircraft industry, and the auto industry,” she continued. “Addressing a problem with China by attempting to limit scrap exports makes no more sense than attempting to limit exports of cars or airplanes. The copper and brass industry should stop trying to punish American businesses and the U.S. economy for its problems with other countries.”

The Export Administration Act allows the U.S. government to impose export controls on scrap metals under specific circumstances when the availability of scrap is an issue or where the price of scrap is significantly impacting overall inflation. The Commerce Department found that neither circumstance was occurring. Issues of trade violations, as alleged by Mr. Mayer in his statement, are more appropriately addressed by other trade remedies.

“ISRI would support the copper and brass industry’s effort to seek relief under a Section 301, for instance, for any documented instances of unfair trade practices,” Wiener said. “As early as last summer, ISRI was voluntarily attempting to address these concerns with both U.S. and Chinese government officials. From the very beginning, we have offered to work with the copper and brass industry to address these matters and to help them seek relief in the appropriate manner. We repeat that offer today.

“ISRI looks forward to opportunities to work with the copper and brass industry toward effective solutions to their concerns and toward a better understanding of our respective industries,” Wiener said.

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