EoW September 2012

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Transatlantic cable
September 2012 28
† The Chinese tari s on the steel imported from the US,
which AK Steel said amounted to about 19.5 per cent on
its products, will remain in force pending China’s appeal
from the WTO decision. While a rming that right of appeal,
Mr Reif had an interim suggestion for Beijing: that it “take on
board the [WTO panel’s ruling] and comply promptly.”
In Washington, Russia’s Severstal and
Nucor lock horns over the alleged
dumping of hot-rolled steel in the US market
Its victory over China in the matter of electrical steel exports
(See “World Trade Organization,” previous page) may have to
serve the US steel industry with all the exultation it is going to
enjoy for a while. Another international trade dispute – the
rst involving Russian exports since Russia was accepted into
the WTO late last year – is looming in the International Trade
Administration (ITA), with potential to create considerable
turbulence.
The ITA is an agency of the US Department of Commerce
with a mission to safeguard American companies from unfair
competition. In response to a request from Nucor Corp
(Charlotte, North Carolina) the ITA is looking into the claim
that Severstal, the largest steel company in Russia, dumped
“hot-rolled at-rolled carbon-quality steel product” in the
American market.
Alan Price, the Washington attorney for Nucor, the largest
US mini-mill operator, has said he expects to achieve penalty
import duties against several categories of hot-rolled steel from
Russia of between 78 per cent and 180 per cent.
This would be su cient to kill the trade, which in 2011
generated 5.7 million metric tons of Russian exports to the US,
worth $3.8 billion.
As noted in Business Insider by John Helmer, widely known
as the foreign correspondent with the longest continuous
service in Russia, Nucor’s claim for penalties against the Russian
imports is based on a 15-year old calculation of Russian steel
manufacturing costs and prices.
Writing from Moscow, he explained that, because Russia’s
economy was classi ed as a “non-market economy” at the
time, the calculation by the Department of Commerce was not
made on the basis of direct Russian evidence. (“Who’s for
Competition in This Steel Trade Contest?”, 10th June).
In such cases, US trade law permitted data for costs and pro ts
to be taken from a surrogate-country steelmaker, applied to
the “non-market economy” steelmaker, then used to estimate
a dumping margin and thus inform the penalty duties. The
American case against Russian steel was based on price data
generated between 1996 and 1999 – in Brazil.
“Nucor’s case is thus based on a technicality of US trade
law which its lawyer argues the Russians have been taking
advantage of,” Mr Helmer wrote. “According to Mr Price, Nucor
wants to swing the technicalities vice versa.”
In response to the American claims, the Russian steel industry
association Russkaya Stal said that there has been no
violation of the trade agreement that has been in place since
1999; no evidence of unlawful price competition in the US
market by Russian hot-rolled steel; and no justi cation in US
trade law for the import penalties and deal breakers Nucor
would like to see.
† At this stage not much is clear except that the stando will
likely produce a clash of titans, and that Severstal will be a
nimble-footed one. Business Insider recalled that Severstal
has switched its trade tactics towards the US more than once
over the years. The company’s owner, Alexei Mordashov,
most recently “changed tack” when Russia achieved market
economy status – as de ned by Washington.
Mr Helmer concluded: “In February, trade o cials for the
US and Russian governments started new negotiations on
their issues in Washington. The talks are continuing, with
a deadline for revising the terms of their steel trade by late
September, a few weeks before the American elections.”
Telecom
Europe’s operators complain to the UN
that American content providers are
free-loading on the world’s bandwidth
A group representing 35 European telecommunications
companies wants to charge US-based Internet giants like
Facebook, Google and Net ix a bandwidth fee for the privilege
of servicing their own users in Europe.
The Brussels-based European Telecommunications Network
Operators Association (ETNO) submitted a proposal to the
International Telecommunication Union (ITU), the specialised
Geneva-based United Nations agency, calling for a levy on
American sites and providers reaching out to their customers
outside of the United States.
Condensing a report developed by CNET (7 th June) from ETNO
documents, Rawiya Kameirif of ITProPortal wrote that the
leaked materials add context to long-running complaints from
European telecoms that American content providers consume
global bandwidth “for free.”
The principle being urged by ETNO – that “the sending party
[network] pays” – would oblige US content providers to pay a
per-minute price, as determined by the user’s network operator,
to reach non-US customers.
The UN has previously contemplated various forms of “Internet
taxes” but not implemented any of them. While it is unclear
whether this latest proposal has real prospects, it is nonetheless
highly controversial. Ms Kameirif wrote: “Some experts have
expressed fears that, while it could prove to be a boon for
governments looking for additional forms of revenue, a tax of
this nature could serve to isolate people around the globe.”
Sally Shipman Wentworth, senior manager for public policy
at the Internet Society (Reston, Virginia) is among those
in opposition. Pronouncing the ETNO proposal “extremely
worrisome,” she declared that it could create “an enormous
amount” of legal uncertainty and commercial uncertainty.
CNET’s Declan McCullagh and Larry Downes also mentioned
concerns raised by the Obama administration and members
of Congress “about a radical re-engineering of the Internet
ecosystem,” allowing governments to monitor or restrict their
citizens’ online activities.
† According to the CNET reporters, the leaked documents were
posted by the website WCITLeaks, created by two policy
analysts at the free-market Mercatus Center at George Mason
University in Arlington, Virginia.