South Korean OCTG Dumping Represents Blueprint to Undercut US Industry, Say Lawmakers, Witnesses
The Commerce Department is letting South Korean industry off the hook with its decision in February to not suspend liquidation or impose antidumping duty cash deposit requirements on South Korean oil country tubular goods, said industry witnesses and Democratic lawmakers at a June 25 Senate Finance Committee hearing on trade enforcement in U.S. trade policy. South Korean firms did not dump the steel products, typically used for ocean and land energy extraction projects, said Commerce in a preliminary ruling (see 14061921). Lawmakers on Capitol Hill have roundly rejected the Commerce decision over recent months, saying egregious dumping is damaging U.S. industry (see 14061921).
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The South Korean OCTG dumping is providing a dangerous template for other foreign industries to undercut U.S. industry and evade U.S. antidumping duties, said some officials and lawmakers. “They have no domestic oil country tubular good market … they do not drill for oil and gas, the point of the oil country tubular goods production,” said Sen. Sherrod Brown, D-Ohio, during the hearing. “They have an industry designed solely to take advantage of other markets, primarily our market.” Commerce should set duties at 95 to 96 percent, similar to duties imposed on China, in its antidumping duty order on South Korea, said United Steelworkers President Leo Gerard at the hearing. Gerard said he was “petrified” that Commerce would ultimately rule to apply a meager 4 to 5 percent duty.
From 2010 to 2012, industry from nine foreign countries increased exports to the U.S. market by 113 percent compared to the years prior, said Mario Longhi, president of the United States Steel Corporation, alleging that South Korea is indisputably the most aggressive culprit. May 2014 trade statistics show foreign industry exported more than 400,000 net tons of OCTG to the U.S. market, representing a 77 percent increase from the May 2013 statistics, said Longhi. Commerce is investigating OCTG imports from July 2012 to June 2013 (see 14022425).
South Korean industry is exercising “gamesmanship” in its objective to evade U.S. antidumping duties, said Longhi. “Their efforts are unchecked and, sadly, very effective,” said Longhi. “They have routinely abused the process, and as a result, the investigators are forced to review incomplete information in an untimely manner.” The Commerce Department is unable to accurately and thoroughly review U.S. industry allegations of dumping because South Korean companies are providing incoherent documentation, which ultimately reduces the amount of time Commerce investigators are able to spend on investigating the relevant data, said Longhi.
The other eight countries involved in the Commerce investigation include Thailand, Taiwan, Saudi Arabia, the Philippines, Turkey, Ukraine, India and Vietnam. The OCTG dumping represents a tangible threat to the future of U.S. industry, said Longhi and Gerard, adding that Chinese steel production is also increasingly worrying U.S. steel producers. “This year China produces a billion tons of steel,” said Gerard. “The world consumption is about 1.4 billion. Don’t tell me that they aren’t planning to put us out of the market. That’s their plan.” -- Brian Dabbs