TPT May 2014

Global Marketplace

among others. Mr Hitokoto observed that some industry sources saw this as a possible sign that a war of retaliation had begun. “The implementation [of antidumping measures] is increasing in emerging countries,” an official of Japan’s Ministry of Economy, Trade and Industry told Yomiuri Shimbun . “It’s unclear whether investigations are appropriately conducted in emerging countries. We need to carefully and closely observe the situation.” › A somewhat more emphatic Mr Hitokoto declared: “Abuse of antidumping measures likely will cast a shadow over the future of the free trade system, which is Japan’s lifeblood.” Of related interest . . . › The US Department of Commerce on 5 March announced its preliminary determination that imports of grain- oriented electrical steel (GOES) from China are benefiting from unfair government subsidies. As of early May, US importers of Chinese-origin GOES are required to deposit estimated countervailing duties at the time of importation. The determination grows out of the September 2013 filing of petitions by domestic GOES producersAK Steel andAllegheny Ludlum, and the United Steelworkers – the union representing GOES workers at Allegheny Ludlum. The petitions allege that unfairly low-priced and subsidised imports of the flat-rolled alloy steel product from China – as well as Japan, South Korea, Germany, Poland, the Czech Republic and Russia – are causing material injury to the domestic industry. Korea is cleared of charges of dumping OCTG in the US market. But, even when successful, how effective are trade cases? “The findings hit US Steel particularly hard because it is the largest North American tubular steel producer. AK Steel also produces tubular steel.” Ben Fox Rubin of the Wall Street Journal was reporting on the 18 February disclosure by the US Department of Commerce of preliminary findings in its investigation into the dumping of oil and natural gas tubular products in the American market. The determination that a major importer – South Korea – is not selling these products in the US at less than fair value puts pressure on the domestic steelmakers. Dumping issues were found with imports from India, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam, and the companies involved now face antidumping duties. But all these countries import much less of the target products than Korea – by far the largest importer of those products into the United States. Mr Rubin noted that US Steel Corp is already coping with weak pricing and lower shipments of its products, which helped push it into the red for every quarter of 2013. The Pittsburgh steel giant has instituted a number of management changes, including a shake-up last summer

Steel Japan perceives an injustice: antidumping measures imposed against Japanese steel to deflect suspicions of anti-China bias “A dramatic rise in antidumping duties and investigations prompted by a sharp increase of low-priced steel product exports from China may prove harmful to free trade, according to the Japanese government and Japan’s steel industry.” Takeyuki Hitokoto, staff writer for the Tokyo-based daily Yomiuri Shimbun , was taking note of the large number of Japanese steel products, in 27 categories, that currently are targets for duties in nine countries. In one instance, the Australian government announced on 8 January that it had begun an antidumping investigation into alloy steel products imported from three countries including Japan. In his article, reprinted by the Hamilton Spectator (Ontario, Canada), Mr Hitokoto recalled that Australia had already – in December 2013 – imposed antidumping measures against hot rolled plate steel imported from countries including Japan, China and South Korea. He reported that the announcement in January was seen as “another harsh blow” to the Japanese side. (“Japan Hurt by Steel Import Limits Aimed at China,” 18 February) Citing the assertion of the Japan Iron and Steel Federation that exports of hot rolled plate steel from Japan have caused no injury to the domestic industry in Australia, Mr Hitokoto explained the unprecedented implementation of antidumping measures or investigations by reference to the prevalence globally of low-priced Chinese steel due to continued overproduction in China. Steel exports from China totalled 55.8 million tons in 2012, a tenfold increase over ten years – and construction of new steel plants continues. Emerging Asian nations, including Indonesia and Thailand, have responded by imposing antidumping measures against steel products. The World Trade Organization permits the implementation of antidumping measures to prevent unreasonably low-priced imports. The WTO requires each country intending to impose antidumping measures to prove the exporting country is selling the products at a lower price than the price at which they are sold in its own country. As reported by Mr Hitokoto, nations that have imposed such measures “have often included items and countries that do not cause real harm, as they do not want to give the impression they are targeting only China and risk an all-out confrontation with China.” J apanese resentment simmers Currently, the cost of the additional duty is shouldered by Japanese companies – such as automakers – which use Japanese steel for production in countries that have imposed antidumping measures. This results in higher local costs for the Japanese companies. In December of last year China tentatively invoked antidumping measures against high- quality iron pipes imported from Japan and the United States,

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M ay 2014