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From the
AmericaS
78
M
arch
/A
pril
2007
Matters of trade
Prospects are dimming for a US-South Korea
trade agreement
Officials of both governments resumed free-trade talks on
15 January, but the US and South Korea seemed unlikely to
harmonize their differences before the June 30 expiration of
President George W Bush’s
‘fast-track’
authority to move an
agreement quickly through Congress. After that, the opposition
Democrats who control the new Congress can place amendments
on the trade deal, making prompt ratification unlikely.
A pact would give Washington its biggest success since the North
American Free Trade Agreement (NAFTA) a decade ago. But
talks stalled over Washington’s demand for greater access for
American cars, among other exports, and over Seoul’s insistence
on changes in US antidumping rules as applied to South Korean
steel, cars, and other products. Seoul also wants goods produced
by South Korean factories in North Korea included in the
agreement.
South Korea is America’s seventh-largest trading partner,
with bilateral trade topping $74 billion a year. According to the
International Trade Commission, a US federal agency, an accord
could lift American exports to South Korea by $19 billion, while
Korean exporters could expect to make an additional $10 billion in
sales in the United States.
• The Bush administration will renegotiate the language covering
labour rights in free trade agreements it has reached with Peru,
Colombia, and Panama, to help ensure approval for the deals
by the new Democratic Congress. John K Veroneau, deputy
United States trade representative, said on 18 January that
the three countries had been notified and predicted that an
agreement on revised language could be reached without too
much delay.
The announcement was the strongest signal to date that
President George W Bush is prepared to modify his trade
policies in light of Democratic control of the House and
Senate. Democrats, backed by American labour unions, have
long complained that the free trade deals negotiated by the
administration do not include enough protections for American
workers.
Around the companies . . .
›
IDOD Systems
(Grant Park, Illinois) has awarded its first
European license to the
Wuppermann Group
(Leverkusen,
Germany) for use of the IDOD in-line process for continuous hot-
dip galvanizing on both the inside and outside of tube and pipe.
According to the
Preston Pipe Report
for January, Wuppermann will
employ the process at its Judenburg plant in Austria, with shipments
to US customers scheduled to commence in June.
IDOD says that its system applies an ASTM A-53 zinc coating to
both surfaces of extremely thin or thick-wall tube and pipe, and that
it is guaranteed to yield galvanized product that will not chip or flake
during fabrication. The German company will produce round tubulars
in sizes 1.3" to 4.5" and shapes in the range 0.39" to 5.12".
›
Ipsco Inc
, the Canadian maker of steel pipe for oil and natural
gas exploration, on 1 December announced the completion of
its acquisition of
NS Group Inc
(Newport, Kentucky) for US$1.46
billion in cash. With this added capability in energy-related tubular
products, IPSCO could achieve combined annual sales of over
$4 billion, compared with $3 billion in 2005. Canada accounted for
32 per cent (about $979 million) of those sales. IPSCO now expects
to boost its growth in the US, where it estimates sales opportunities
for OCTG to be three times greater than in Canada. According to
Tenaris SA
, of Argentina, the world’s largest maker of OCTG, the
US creates almost half the annual global demand for 10.5 million
metric tons of pipe for oilfield applications.
›
General Electric
said on 15 January that it would pay $4.8 billion
in cash for
Smiths Aerospace
, the cockpit electronics arm of
the London conglomerate Smiths Group. Analysts saw another sign
that GE (Fairfield, Connecticut) is acting on its intention to get out of
underperforming businesses and redirect capital into areas of faster
growth.
Earlier in the month GE had said it would acquire drilling-equipment
maker
Vetco Gray Inc
(Houston, Texas) for $1.9 billion. GE also said
it would seek a buyer for its lagging plastics business. The terms of
its British deal call for GE to pay about 1.8 times the Smiths unit’s
2006 sales. Given the intense activity in the aerospace business,
analysts said GE had little prospect of negotiating a lower price.
Dorothy Fabian
, Features Editor (USA)