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October 17, 2004
JAPANESE STEEL EXECUTIVE CRITICAL OF U.S. ENFORCEMENT OF WTO RULES
GOVERNING ELIMINATION OF DUMPING DUTIES
LAS VEGAS, NV - Japanese steelmakers
are very concerned about the way the U.S. government enforces the
WTO anti-dumping treaty involving the sunset review of penalty duties,
according to Tsukasa Kose, President, Kobe Steel America. In a presentation
to the Association of Steel Distributors here, Mr. Kose noted that
the WTO rule notes that any duty imposed by the U.S. trade law “shall
be terminated on a date no longer than five years from its imposition
unless there are strong and specific reasons to extend it. However,
the U.S. government allows the anti-dumping duty to be extended
even after five years, unless there are strong and specific reasons
to terminate it.” Mr. Kose notes that “this is not in
the spirit of the WTO regulation.
“In many steel anti-dumping cases, the U.S. never allows
the sun to go down,” he added. He pointed to an upcoming review
of hot-rolled coils which are “in tight supply” and
“are at historically high prices.” If the U.S. government
does not terminate this duty, “there is absolutely something
wrong with the U.S. procedure.” The Japanese executive said
he has no objections to the enforcement of U.S. trade measures,
only that they be WTO consistent.
A measure that is WTO illegal is the so-called Byrd Amendment
which allows American steel companies, instead of the government,
to collect penalty duties. He said “Japan and other countries
now have the right to retaliate. But Japan would rather get the
U.S.A. to comply with WTO rules. Another proposed program being
considered by the U.S. is an expanded and permanent licensing and
monitoring system on steel imports. Mr. Kose said that this should
be “consistent with WTO rules and should not create further
trade restrictions.”
Because of U.S. trade restrictions and significant demand in Asia,
Japanese steel exports to the United States have fallen sharply
in recent years and were just over one million tons last year, the
lowest level since the early 1960s.
He said that, “heavy anti-dumping duties” on such products
as hot-rolled coils and coated sheet made them too expensive for
U.S. customers who had to switch “to domestic alternatives
even though they were not satisfied with the quality.” At
present Japanese exports are limited to highly specific products
which are difficult to obtain from U.S. mills, he added.
Looking at steel trade in Asia, Mr. Kose noted that
despite current capacity expansions in China, there will still be
a limited domestic supply of high quality steel for automotive and
appliance use. He assumed that China will keep depending on Japanese
steel products for the time being. Currently, Japan exports over
six million tons annually to China.
While there are estimates that there is a need to create each
year 35 million more tons of capacity to meet the current shortfall,
some are concerned about the possibility of a huge surplus if the
Chinese government does not restrict new steel plant construction,
most of it is in the low-end long products, he noted.
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