CHANGE IN RUSSIAN TRADE STATUS HURTS LA. FERTILIZER INDUSTRY
FOR IMMEDIATE RELEASE
6/6/02
By John Breaux

WASHINGTON (June 6) - U.S. Sen. John Breaux (D-La.) today expressed concern about a decision by the Department of Commerce to revoke Russia's non-market economy status ("NME") under U.S. antidumping laws and the negative impact the decision will have for the American nitrogen fertilizer industry:

"Unfortunately, today's decision by the Commerce Department will have a major impact on the nitrogen fertilizer industry in Louisiana and throughout the country. This industry is forced to compete against Russian producers who unfairly benefit from government-set, below-cost natural gas -- which accounts for as much as 80 percent of the cost of producing nitrogen fertilizer.

"The defense U.S. producers once had against unfairly priced Russian imports of nitrogen fertilizer was Russia's status as an "NME" under our antidumping law. Now that defense has vanished and Russian producers will continue to enjoy a tremendous advantage over domestic producers of nitrogen fertilizer.

"I fully support the historic new relationship between Russia and the United States, but Russia has not adequately converted to a market economy with respect to their natural gas industry and, therefore, should not be classified as a market economy under our trade laws.

"Given the difficult financial situation facing the domestic nitrogen fertilizer industry, I had asked the Commerce Department to make an exception for the nitrogen fertilizer industry as long as the Russian natural gas sector continues to operate on a non-market economy basis, and until market reforms in that sector have been effectively implemented by the Russian government.

"Without this exception, the domestic nitrogen fertilizer industry must compete with massive surges of Russian nitrogen imports that could have devastating economic consequences for the entire industry. In the meantime, I intend to work closely with U.S. industries impacted by this decision and with the Administration to minimize the adverse effect of today's decision."

FACTS ABOUT THE LOUISIANA NITROGEN INDUSTRY:

-- Louisiana's nitrogen industry accounts for approximately 30 percent of domestic nitrogen fertilizer used in this country.

-- The Louisiana nitrogen industry provides jobs for nearly 1,000 permanent, full-time employees living in about 18 parishes.

-- With a total payroll of nearly $67 million annually, these companies pay $17 million per year in state and local taxes from ammonia producing facilities; not including severance taxes previously paid on the natural gas consumed in making ammonia.

-- Six Louisiana companies operating seven facilities utilize more than 150 billion cubic feet of natural gas each year to produce 4.5 million tons of anhydrous ammonia.

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