CONCERN OVER U.S. ANTI-DUMPING INVESTIGATIONS ON STEEL

Oct 28, 1992

CONCERN OVER U.S. ANTI-DUMPING INVESTIGATIONS ON STEEL

GENEVA, 27 OCTOBER (CHAKRAVARTHI RAGHAVAN) – Concern over what the European Community described as "a flood" of anti-dumping investigations launched in the United States on imports of steel were widely expressed Tuesday at the meeting of the Tokyo Round Anti-Dumping (AD) Code committee.

The European Community which raised the issue was supported by a large number of others who are all affected by the petitions and complaints against imports launched by the U.S. steel industry and being investigated by the United States International Trade Commission (ITC).

Expressing its serious concern over the developments, the EC charged that there had been a flood of investigations, some 84 anti-dumping and countervailing (AD/CV) investigations on steel products from 21 countries, with 38 of the cases involving imports from the EC which exports two million tons a year to U.S.

Also, in August and September, the EC said the ITC had made a preliminary determination of dumping on certain steel products from France, Germany and the UK.

The United States, the EC charged, was using the AD procedures to harass foreign competitors.

For more than ten years, steel imports into the U.S. had been governed by a multilateral agreement establishing quotas. But the agreement had not been extended early this year.

"Is it merely a coincidence", the Community asked, "that 16 days after the failure of the talks, there has been a flood of anti-dumping petitions from the U.S. steel industry? Why was there this sudden dumping injury when the volume of trade in steel has not changed, nor the prices and the prices of steel products from the EC are in fact higher than those of the United States?".

The Community was specifically concerned that in calculating the steel price and the dumping margins, the U.S. was taking into account the price charged in the EC by the VAT (value added tax) which is normally is not levied on exports and is not to be taken into account.

The U.S.. instead of using the "best information" available regarding dumping (as required by the code) was using the worst information possible, the EC charged and wanted the U.S. to reconsider these investigations.

Japan said the U.S. actions would make it more difficult to continue with the multilateral steel negotiations and stressed that the U.S. actions should be fully in compliance with the AD code.

Austria said the U.S. investigations had become an unjustifiable impediment to trade and discouraged steel exports to the United States. Austria, for example, exported only 700 tons to the U.S. this year, but has had to employ expensive lawyers and pay for 400 hours of attorney's time to defend the export of 700 tons.

The Nordics said that Finnish and Swedish companies were also affected by the U.S. action and there was great risk that this would lead to a hold-up of exports of Finnish and Swedish steel to the U.S.

Brazil also expressed its concern over the sudden plethora of AD petitions.

The United States delegation, for its part, said it would convey to Washington the concerns expressed, but said the objective of the ITC investigations would be to establish an impartial and thorough process in which all interested parties would have an opportunity to present their case. The cumbersome procedures complained about by Austria were statutory requirements and the U.S. would urge all parties to encourage their exports to participate fully in the investigations.

Earlier, the committee was advised that the United States could not agree to the adoption of a panel report on a complaint brought by Sweden relating to levy of AD duties on imports of seamless steel. This was the seventh time that the report of the panel had come up before the committee, with Sweden pressing for adoption and implementation of the ruling by the U.S.

On another panel ruling against the U.S., the ruling relating to levy of AD duties on gray portland cement and cement clinker from Mexico, the U.S. sought and obtained postponement of the consideration of the panel report pending bilateral consultations and talks with Mexico.

The Committee found itself blocked from a decision by the European Community over Japan's request for a panel to examine the imposition by the EC of anti-dumping duties on audiotapes and cassette imports originating in Japan.

The Committee meeting has been prolonged till Friday, during which interval the chairman, Mexico's Armando Ortega Gomez is to hold consultations to bring about a consensus.

The EC had imposed definitive AD duties of 15 to 25 percent on these imports from Japan in May 1991. Since then there had been unsuccessful consultations between Japan and the EC in July, October and December of 1991 and again in April 1992. Conciliation by the committee in July t992 was unsuccessful.

Under the code, when the conciliation by the Committee is unsuccessful, three months after this a complainant may request for a panel.

Japan told the committee Monday that the EC AD duties were excessive and that the methodology used in determining the duties was biased against the exporter and thus inconsistent with the code. The EC had failed to establish that in fact the imports from Japan were causing injury to domestic producers.

While the EC imports of audiocassettes from Japan rose slightly from 1985 to 1988, their percentage share in the total EC market had declined from 41 percent to 35 percent. Japanese audiocassettes were in the higher price segment of the market and thus did not compete directly with lower-priced EC cassettes. The EC made a finding of injury in only one member State but applied the duty throughout the Community. Since Japan had gone through all the procedures, a panel should be set up to examine its complaint.

At the conciliation meeting in July, the EC had taken the position that Japan's real target was the EC methodology used in AD procedures. The case involved four Japanese companies dominating a closed domestic market and using the profits from high local prices to subsidise exports and establish plants abroad.

Japan's imports of cassettes were almost non-existent - 0.51 percent of consumption in 1991. The share of EC producers had gone down to 15 percent because of the Japanese dumping and the duties imposed were a moderate response to the dumping margins of between 40 to 60 percent.

If Japan pursued this case it would be responsible for casting the first stone on the Uruguay Round draft, the EC delegate warned at the July meeting.

At the meeting Monday afternoon, the EC said that while it did not question Japan’s right to ask for a panel, the request lacked clarity and the EC was not certain, from the Japanese communication, as to what would be terms of reference. The EC therefore sought a deferment of the request pending adequate clarification by Japan.

Committee chairman Ortega said that there seemed to be a consensus on the establishment of a panel and it was only a question of terms of reference and he would therefore hold consultations on this matter with both parties and report on Tuesday. The U.S. supported Ortega's efforts but questioned the specificity of the request by Japan.

At Tuesday's meeting, Ortega reported that his informal contacts had failed, but that both parties had agreed that, the meeting of the committee should not end but should be resumed Friday to expressly consider Japan's request.

A number of delegations then took the floor to support Japan's request. Among these were Brazil, Singapore, Hong Kong, Switzerland, U.S., India, Canada, the Nordics, Australia, New Zealand and Austria, as well as Argentina an observer. All of them said that the code procedures were very clear and at the end of unsuccessful conciliation by the Committee a dispute settlement panel had to be established.

Austria said that it seemed that the committee had reached a consensus barring one and the chairman should ensure that when the committee met Friday this objection to the consensus would be removed.