WTO backs US in case against China duties on steel

A World Trade Organisation panel on Friday ruled in favour of the United States in a case against import duties imposed by China on a specialty steel product used in power transformers.

“With respect to each of the 11 programs at issue, the panel concluded that China had acted inconsistently” with WTO rules governing the use of countervailing duties, the panel said in its ruling. The case involved Chinese duties on potentially hundreds of millions of dollars of “grain-oriented flat-rolled electrical steel” (GOES), a specialty steel product made by AK Steel Corp of Ohio and ATI Allegheny Ludlum of Pennsylvania.

US Trade Representative Ron Kirk said in a statement: “The panel upheld our claims that China’s duties on US exports of steel products failed to comply with many WTO rules. This decision sends another clear signal to China that it must do more to fulfill its WTO commitments, and that it will be held accountable to play by WTO rules.”

China had imposed the punitive duties after its top silicon steel producers Baosteel Group and Wuhan Iron and Steel Group had complained about imports from the United States and Russia, which is not yet a member of the WTO and was not involved in the case.

The Chinese steel giants were unhappy about the “Buy America” provisions of the American Recovery and Reinvestment Act of 2009 and State government procurement laws.

China imposed the duties in April 2010, prompting the US to take the case to the WTO for adjudication. It claimed that China lacked sufficient evidence of unfair US pricing practices or government subsidies to impose the duties.

China’s Ministry of Commerce said in a statement: “With regard to the panel’s findings on other issues in dispute, China will conduct further evaluation and reserves the right to appeal.”

Grain-oriented electrical steel, also known as grain-oriented silicon steel, is used for the cores of high-efficiency transformers, electric motors and generators.

 

(Reporting By Doug Palmer and Tom Miles; Editing by Doina Chiacu and Stephen Nisbet)