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66

J

anuary

2011

www.read-tpt.com

G

lobal

M

arketplace

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

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.]

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)

Ron Kirk, US trade representative