Trade Commission Tells South Korea, Others To Stop “Dumping” Steel

Dave Johnson

The International Trade Commission (ITC) ruled last week that South Korean companies are “dumping” steel pipes, tubes and fittings used by oil companies – known formally as oil country tubular goods (OCTG) – into the U.S. market. “Dumping” means selling for below-market prices in an effort to put competitors out of business. This is a big deal for the U.S.-based steel industry.

May’s post, “Another Trade Cheating Issue Risks Another Half A Million Jobs,” described the problem:

There has been a surge in steel imports, as companies in other countries try to make up for low demand by selling steel in the U.S. at below-market prices. This is putting hundreds of thousands of American jobs – and our steel industry – at risk.

On a May call about this issue, Senator Sherrod Brown (D-Ohio) described the problem, singling out South Korea and saying it has one of the world’s largest steel industries, “but not one foot of the OCTG they make is sold in Korea. This is clear evidence of cheating.”

On the same call Sen. Jeff Sessions (R-Ala.) said, “We have trading partners who sell billions to us and buy very little from us.” He said these trading partners “see us as a big fat market they can exploit when they are in trouble.”

A May report co-authored by the Economic Policy Institute (EPI) and the Law Offices of Stewart and Stewart”, Surging Steel Imports Put Up To Half a Million U.S. Jobs at Risk,” found that about half a million jobs were at risk because of surging steel imports.

The Ruling

According to Steel Market Update the ITC ruled that OCTG from India, Korea, Philippines, Taiwan, Thailand, Turkey, Ukraine, and Vietnam are being “sold in the United States at less than fair value,” and imports of these products that are subsidized by the governments of India and Turkey.”

As a result of the USITC’s affirmative determinations, the U.S. Department of Commerce will issue countervailing duty orders on imports of these products from India and Turkey and antidumping duty orders on imports of these products from India, Korea, Taiwan, Turkey, Ukraine, and Vietnam. No orders will be issued on imports of these products from Philippines and Thailand.

Comments On The Ruling

Marketwatch reported that U. S. Steel President and CEO Mario Longhi issued a statement saying:

“United States Steel Corporation is pleased with the International Trade Commission’s affirmative final vote to impose anti-dumping orders against six of the nine countries that are dumping Oil Country Tubular Goods (OCTG) into the market. U. S. Steel will continue to evaluate all of its options, including further litigation, with regards to Saudi Arabia, who was excluded from the International Trade Commission’s final vote as a result of an amended final determination from the Department of Commerce, and the two countries (Thailand and the Philippines), for which the ITC reached a negative determination.

“The International Trade Commission’s diligent and conscientious investigation and affirmative final vote clearly recognized that these six countries, which represent more than 90% of the unfairly traded imports that entered the U.S. market in 2013, imported OCTG using unfair methods and market distorting pricing. The dumped imports from all nine countries have caused material injury to the American market and the American worker. Orders have been reduced, mills idled and jobs have been lost.

“We are satisfied that the affirmative vote will ensure a more competitive and fairer OCTG market for American manufacturing and American workers. While U. S. Steel will continue on our own path toward sustainable profitability and to supply our customers with innovative steel solutions, we also intend to seek transformative, meaningful change to our trade laws to ensure that fairness will exist and is preserved, which can lead to a brighter future for American industry.”

Alliance for American Manufacturing (AAM) President Scott Paul said:

“The ITC made the right call today; steelworkers and manufacturers have clearly suffered. We hope this decision will boost the prospects for steel jobs and companies in this important market serving America’s energy independence efforts.

“It’s a shame that so much damage has to be done before America’s workers and companies can secure a level playing field. That needs to change, and it’s one thing AAM will be working toward as we move forward. Thanks go out to the tens of thousands of citizens who leant their voice to the #SOSJobs campaign and to all the public officials who took a strong stand for American jobs.”

Robert E. Scott of the Economic Policy Institute wrote,

U.S. officials should enforce U.S. fair trade laws to the fullest extent allowable under U.S. and international law. And the time has come for a complete reassessment of U.S. trade laws to close loopholes and ensure that the law is promptly and effectively enforced to the full extent intended by Congress and the president.

Obama Trade Law Enforcement

This ruling followed a national campaign to drive public awareness and persuade the Obama administration to enforce trade laws in this case of steel dumping. This campaign included a series of rallies in steel-producing states and letters signed by more than 150 members of the House and 57 members of the Senate.

A story in Politico last week, “Barack Obama trade enforcement tally no tougher than George W. Bush’s,” described why this campaign was necessary.

Now, after nearly six years in office, President Barack Obama’s trade enforcement record looks — at least on the surface — more like Bush’s than Clinton’s. Since Jan. 20, 2009, USTR has filed 15 cases at the WTO, for an average of fewer than three per year, according to a WTO tally.

The Obama administration record compares to 24 cases filed by the Bush administration during its eight years in office and 68 cases filed by the Clinton administration between January 1995, when the WTO was created, and January 2001.

The Obama administration counters:

Obama administration officials, like Bush administration officials before them, say it is misleading to compare the number of cases they’ve filed with the Clinton administration. That’s because those early disputes reflect easy, “low-hanging fruit” after the creation of the WTO, which has much stronger dispute settlement procedures than its predecessor, the General Agreement on Tariffs and Trade, the argument goes.

Bolstering that claim, WTO statistics show members filed 185 cases in the first five years of the institution, 139 cases in the second five years, 78 in the third and 80 in the last four years and eight months.

In addition, some disputes that could have been divided into a series of smaller complaints were consolidated into one big case, reducing the overall tally, Obama administration aides said. One case against China, for example, included 13 provinces and hundreds of separate laws and regulations, they said.

[. . .] Two years of automatic budget cuts also put a toll on USTR’s enforcement efforts, as the White House warned in its budget submission to Congress.

“We were down a sizable number of attorneys and did not have the resources required,” Kincaid said.

But still, the numbers are dismal.

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