TPT January 2011

G lobal M arketplace

A ruling by a US independent federal agency ‘saves’ the US market for line and pressure pipe Only a week before the WTO decision was announced, the US International Trade Commission (ITC) ruled that American makers of seamless carbon and alloy steel line and pressure pipe are being harmed by imports from China. The 15 October decision – which paves the way for dumping and countervailing duties on $182 million of product from Chinese exporters – was sought by steel makers including US Steel (Pittsburgh) and the Houston, Texas-based subsidiary of Vallourec SA, of France. They were joined in their petition by the United Steelworkers union. “Without this decision, the US industry would have completely lost the US market,” a lawyer at Schagrin and Associates in Washington, representing the American producers, said in an interview with Mark Drajem of Bloomberg News . Even with duties, said Roger Schagrin, “[There is] going to be a slow recovery in demand.” The ITC does not itself set duties or determine that an imported product is being dumped or subsidised: it decides on whether or not US makers are being harmed by low-cost imports, leaving further action left up to the Commerce Department. According to Commerce, Tianjin Pipe Group Corp will face a combined dumping and countervailing duty rate of 62.65%; Hengyang Valin Steel Tube Co and related companies, 135.68%. All Chinese steel companies not singled out for review must pay a dumping rate of 98.74% and a countervailing duty of 33.66%. ‘Earths’ Germany’s industrial base is feeling the effects of supply shortages of rare-earth elements from China Chinese restrictions on the export of rare-earth materials, or earths – which have worried Japan, the European Union, and the US at least since mid-2010 – are being felt very acutely by German industrialists. “Germany is dependent on imports for most industrial materials,” German Economics Minister Rainer Bruederle said during a meeting with representatives from German industry in Berlin in October. “That impacts us currently in regard to many metals and energy supplies. But it also impacts us in rare earths that are essential for high-tech industries.” As reported in the Wall Street Journal, Mr Bruederle also observed that the supply shortages of rare-earth materials presented a problem of politics as well as economics. He said that speculation in markets for raw materials is a growing challenge for government officials, and urged that the world’s leading economies confront it at the G-20 summit in South Korea in November. (“Rare Earth Shortages Hit Germany,” 26 October)

Trade In a time of

increasing tensions between China and the United States, tube and pipe figure prominently among the issues Some areas of international contention are so persistent as to seem perennial. With China and the US, currency and trade issues exhibit the greatest staying-power. As for

Ron Kirk, US trade representative

the products most fought over, tube and pipe have become to Chinese-US trade relations what automobiles are in many other quarters of the import-export universe. In a decision rendered 22 October, the World Trade Organization rejected arguments marshalled by China in its September 2008 challenge to US tariffs on Chinese-made circular welded pipe and light-walled rectangular pipe. These were among the specialised products found by the WTO to warrant the American antidumping duties intended to compensate for unfair pricing and to offset improper government subsidies. The tariffs are a holdover from the George W Bush administration, which in July 2008 announced levies on $200 million of steel pipe shipments from China, South Korea and Mexico. This followed by a month the imposition of a similar set of countervailing duties on other steel pipe imports from China. President Barack Obama has defended those decisions by Mr Bush. China’s stated objection to the tariffs turned largely on such technical questions as whether state-owned enterprises and state- owned commercial banks are properly considered public bodies that provide subsidies. This approach failed to persuade a WTO dispute settlement panel. The panel was established in January 2009 and held hearings in July and November of that year. Its decision, published on the WTO website in October 2010, ran to 283 pages. China and the US had 60 days [to 22 December] to appeal. Ron Kirk, the US trade representative, hailed the “significant win for American workers and businesses affected by unfairly traded imports.” Said Mr Kirk, “This case makes clear that the Obama administration, including my [Cabinet-level] office and our colleagues at the Department of Commerce, will vigorously defend the application of our trade remedy laws.” In addition to this pursuit, the Obama administration has agreed to investigate a complaint brought by the United Steelworkers over China’s support for its clean energy industries, and is also concerned about Chinese efforts to block exports of rare-earth minerals. [See “ Germany’s industrial base is feeling the effects of supply shortages ,” below.]

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J anuary 2011

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