TPT January 2011

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66 January 2011 ›
Global Marketplace
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