- The Washington Times - Tuesday, June 17, 2003

The Bush administration yesterday ruled that American catfish farmers and computer-chip manufacturers were subjected to unfair foreign competition and ordered stiff tariffs on imports of Vietnamese catfish and South Korean computer chips.

The Commerce Department rulings upheld, with minor adjustments, preliminary tariff determinations that the agency issued earlier in the year.

In the catfish case, the Commerce Department determined that Vietnam had dumped catfish on the American market at unfairly low prices. It said that catfish imports from Vietnam would be subject to anti-dumping tariffs ranging from 44.66 percent to 63.88 percent.

In the computer-chip case, the Commerce Department ruled that the government of South Korea unfairly subsidized two big South Korean manufacturers and ordered tariffs as high as 44.71 percent.

Both decisions represented major victories for U.S. firms, who had complained that they were losing U.S. sales because of unfair competition.

The Catfish Farmers of America, representing catfish farmers and processors in various Southern states, complained that Vietnam had captured 20 percent of the $590 million U.S. frozen catfish fillet market by selling at prices that were below the cost of production.

Vietnamese companies had argued that they could sell catfish in the United States at lower prices because labor and feed costs were much lower in Vietnam.

Both the catfish ruling and the computer-chip decision will not become final until the U.S. International Trade Commission rules July 31 on whether American companies are being significantly harmed by the foreign competition. The commission has already issued preliminary determinations of injury in both cases.

The Commerce Department ruling in the catfish case kept the high tariff at 63.88 percent on Vietnamese companies that failed to supply information on their costs and imposed a lower tariff of 44.66 percent on seven Vietnamese companies that did supply information on their costs of production.

In the computer-chip case, the Commerce Department imposed a 44.71 percent tariff on dynamic random access memory semiconductors, or DRAMS, made by Hynix Semiconductor Inc. The department ruled that another South Korean chipmaker, Samsung Electronics Co., had received a much smaller government subsidy of 0.04 percent.

The computer-chip case was brought by Micron Technology Inc., the world’s second-largest computer-chip manufacturer. The Idaho company argued that the Korean firms were receiving unfair subsidies from the South Korean government in violation of U.S. laws and World Trade Organization rules.

In Seoul, E.J. Woo, the head of Hynix, issued a statement attacking the Commerce ruling as an “outrageous act aimed at a hidden agenda.”

“It was absolutely clear from the facts of this case that these subsidy levels are unjustified and illegal,” Mr. Woo said. “The only possible explanation is that the Department of Commerce has decided to use this case to pressure the Korean government on the question of economic restructuring.”

Officials of the South Korean government said last week that if the Commerce Department went ahead and imposed the penalty tariffs, it would file a case against the United States before the World Trade Organization, arguing that the tariffs, known as countervailing duties, were not justified under international trade rules.

Vietnamese officials have warned that an adverse ruling in the catfish case would seriously harm its trade relations with the United States. Many U.S. companies are hoping to establish sales operations in Vietnam now that the United States has normalized trade relations with its former enemy.

Samsung and Hynix, formally Hyundai Electronic Industries, are two of the world’s largest computer memory chipmakers and DRAM chips are South Korea’s biggest export item.

South Korea exported $5.97 billion worth of DRAM chips last year with shipments to the United States totaling $1.94 billion, representing 32.5 percent of South Korea’s chip exports.

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