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US probe likely to 'harm' trade ties

By Lu Haoting (China Daily)
Updated: 2009-10-09 08:15

On Tuesday, the EU slapped five-year duties of up to 39.2 percent on steel pipe imports from China. [China Daily]

A US government probe that could lead to anti-dumping levies of nearly 100 percent on imports of Chinese steel pipes could escalate trade disputes between the two countries, industry analysts said yesterday.

Rising trade protectionism, in the name of anti-dumping and countervailing measures, would ultimately derail economic recovery, they said.

The US Commerce Department launched an investigation on Wednesday on whether to impose anti-dumping and countervailing duties on imports of seamless steel pipes from China.

The decision came one day after the European Union announced that it would slap five-year duties of up to 39.2 percent on steel pipe imports from China citing material injury or threat to local producers from rising Chinese imports.

The US case involves steel pipes used for moving natural gas, water, steam and other liquids. The US commerce department said it accepted a petition asking for the probe from the US Steel Corp, V&M Star LP, TMK IPSCO and the United Steelworkers union. It said imports of the product from China rose nearly 132 percent by volume from 2006 to 2008, Reuters reported.

The US petitioners requested a 98.37-percent anti-dumping duty against the Chinese imports and additional countervailing duties to offset alleged Chinese government subsidies. The US International Trade Commission is scheduled to make its preliminary injury determination at the beginning of next month.

Related readings:  China continues anti-dumping measures on some imported PVC  EU trade chief visits China amid dumping row  China strongly opposes US duties on Chinese pipe imports  China 'regrets' at Australian anti-dumping probe

The move comes less than a month after US President Barack Obama agreed to slap hefty duties of up to 35 percent on imports of Chinese tires. Also last month the US imposed preliminary duties ranging from 10.9 to 30.6 percent on imports of Chinese steel pipes used for oil drilling. That case involved $2.7 billion worth of steel pipes and a final decision would be announced on Nov 23.

Comments from the Chinese Ministry of Commerce were not available.

"Trade protectionism is rising amid the global economic crisis and has led to abuse of anti-dumping and countervailing measures. That would ultimately harm the global economic recovery," said Zhang Yuqing, a panelist with the Dispute Settlement Body of the World Trade Organization (WTO).

The number of anti-dumping or countervailing cases worldwide could double and surge to a record high this year, the WTO said in July. China has been the biggest victim and 17 countries and regions initiated 79 trade remedy investigations against China in the first eight months of this year, up 16.2 percent year-on-year, according to the Chinese commerce ministry. The cases involved Chinese exports worth $10.035 billion, up 121.2 percent over the same period last year.

"Threat of material injury is rarely cited as a reason for anti-dumping ruling practice. It is strictly defined by the WTO rules and members should be highly prudent in such cases," said Zhou Shijian, a senior analyst at the Sino-US Relations Research Center of Tsinghua University.

China's commerce ministry said the EU should come up with more evidence to prove the accusation under world trade rules. China Iron & Steel Association (CISA) said it might submit an application to the WTO to settle the dispute.

Exports of Chinese-made seamless steel pipes to the EU decreased by 70.96 percent year-on-year from January to August this year, according to CISA.