- The Washington Times - Thursday, December 14, 2006

The International Trade Commission voted yesterday to revoke steel duties on four countries, handing the automobile industry a victory.

The duties, imposed in 1993 on corrosion-resistant steel from six countries, were put into place to head off unfair foreign competition.

Auto manufacturers, which are major users of steel, wanted the duties lifted because they said the previously ailing steel industry no longer needed the duties’ protection and because they wanted a more flexible source of supply.

The steel industry wanted the duties to remain because they said they feared an influx of “dumped” steel, meaning steel imported at unfairly low prices.

In its decision, the commission lifted the duties on steel from Australia, Canada, France and Japan, while leaving them in place for Germany and South Korea.

The automobile industry says the decision will not result in dumping.

“All these companies are going to continue to buy the vast majority of their steel from American suppliers,” according to lawyer Mark McConnell, whose law firm, Hogan & Hartson, represents DaimlerChrysler, Ford Motor Co., General Motors Corp., Honda of America Manufacturing, Nissan North America and Toyota Motor North America.

“All of these duties are outdated and hurt American manufacturing competitiveness and U.S. jobs while needlessly helping a steel industry that is now profitable and healthy,” said Stephen E. Biegun, Ford’s vice president for international governmental affairs.

“What the decision of the ITC did,” he said, “in almost an unprecedented fashion, is made the case emphatically that if economic conditions change and a country stops dumping steel in the United States, then there’s no longer a justification to maintain punitive tariffs on their products.”

Removing duties is a rare action by the trade panel, especially in cases involving steel. The U.S. government has 136 anti-dumping and countervailing orders in place involving steel products, making the metal the most protected by those measures, according to a study released last month by Daniel Ikenson of the Cato Institute.

In 75 percent of cases when the ITC held sunset reviews, it found in favor of continuing the tariff protection, according to Mr. Ikenson, who opposes those measures.

“We are naturally disappointed in the negative determinations,” said Alan Price, a lawyer for Charlotte, N.C., steel maker Nucor Corp. “Because China is flooding the world market with steel, we are concerned that the removal of these orders could contribute to new surges of dumped and subsidized steel.”

William E. Gaskin, president of the Precision Metalforming Association, said he was pleased that the ITC lifted duties on four countries, but was disappointed that the commission did not completely eliminate the duties, which he said seems “warranted,” given the current health of the steel industry.

“If not now, when?” he said.

“The steel industry is consolidated, is profitable — in some cases record profits. The outlook for the next several years is very positive, and so, if this isn’t the environment that you eliminate duties in, when do you eliminate them?” he said.

This article is based in part on wire service reports.

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