Cardin backs import fee to offset energy tax

May 13, 1993|By John B. O'Donnell | John B. O'Donnell,Washington Bureau

WASHINGTON -- When two Baltimore-area corporations complained to Rep. Benjamin L. Cardin that President Clinton's proposed energy tax would give their foreign competitors an unfair advantage, he went to bat for them.

Mr. Cardin has been lobbying his colleagues on the House Ways and Means Committee to help Bethlehem Steel Corp., Crown Central Petroleum Corp. and other companies compete with imports. Mr. Cardin has offered an amendment to "level the playing field" by imposing on all imported "energy-intensive primary products" a fee equal to the energy tax imposed on similar products manufactured in the United States.

The Baltimore Democrat would not speculate on the chances for his proposal's adoption when the Ways and Means Committee begins voting on the administration tax package, probably today, but said he was "encouraged by my colleagues' comments. It has gotten a very favorable response."

He said the White House has taken no position on the fee, which, it is estimated, would raise nearly $500 million a year when fully implemented.

Initially, Mr. Cardin proposed the import fee for steel, aluminum, petroleum products and chemicals, but was persuaded by other members of Congress earlier this week to broaden it. His proposal now would apply the fee to any imported "primary product" for which the cost of energy in manufacturing is 2 percent or more of the value of the product.

While the fee would apply to "primary products" like steel, it would not apply to finished manufactured products, for example, automobiles.

Bethlehem Steel, with 6,800 workers at its Sparrows Point complex, estimates that without the import fee, foreign steelmakers would have an advantage of $5 a ton on shipments to the United States. John Bauer, vice president of the Armco Inc.'s Washington office, says the advantage would range from $3 a ton to $8 a ton.

"We think it has a good chance of passing because it is a matter of jobs," said Henry Von Spreckelsen, a Bethlehem spokesman at the firm's headquarters in Bethlehem, Pa.

The steel, chemical and plastics industries have been pressing Congress for a change in the legislation to place on "energy-intense" imports the same burden that the energy tax places on the domestic producers.

They have an unlikely supporter in the liberal Public Citizen, a Ralph Nader organization, which says that foreign producers have an unfair advantage over U.S. manufacturers who "play by the rules" in observing U.S. environmental, health and labor laws.

"It's a great idea," said Lorie Wallach, who heads Public Citizen's trade projects, of Mr. Cardin's proposal.

Whether the proposal will pass muster under international trade agreements is open to question.

"We think we are on solid ground," Mr. Cardin says, though headmits his interpretation is open to dispute. But, he added, the latest round of trade negotiations, the so-called Uruguay Round, which has not been completed, would make "border adjustment" fees --like the one he proposes -- legal.

A spokeswoman in the office of Mickey Kantor, U.S. trade representative, said the administration was aware of the Cardin proposal and was "looking into it."

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