Kenneth J. Pierce from Vinson & Elkins LLP, one of the oldest and largest law firms in the US, stated at the SteelOrbis Spring 08 Conference and 58th IREPAS Meeting held in Istanbul that the EU victory in the WTO case against "zeroing" (i.e. non-dumped sales do not offset dumped sales) in the US has forced the US to eliminate this practice in most dumping investigations. As a result, US AD duty orders were revoked in the cases of HR from Netherlands and SS rod from Sweden.
Other resulting impacts on five steel antidumping orders are as follows: the AD margin for SS rod from Spain changed from 4.76 percent to 2.71 percent, the AD margin for SS rod from Italy decreased from 12.73 percent to 11.25 percent, SS plate from Belgium went from from 9.84 percent to 8.54 percent, CTL plate from Italy from 7.85 percent to 7.64 percent and as regards SS bar from Germany: Einsal revoked, BGH changed from 13.63 percent to 2.59 percent, Edelstahl from 15.40 percent to 10.82 percent, Krupp from 32.32 percent to 31.25 percent and all others from 16.96 percent to 15.16 percent.
However, the removal of ‘zeroing' has brought unexpected consequences - i.e. changes in calculation in many cases. Also, unintended consequences for three orders are as follows:
SS bar from France: UGITECH revoked, but all others increased 3.9 percent to 35.92 percent,
SS bar from Italy: Valbruna, Foroni, and Rodacciai revoked, but all others increased 3.81 percent to 6.60 percent
SS bar from UK: Corus revoked, but all others increased 4.48 percent to 83.85 percent.
The EU is currently challenging the US decisions at the WTO.
Mr. Pierce added that the EU has been a successful challenger of US subsidy cases. It has achieved the revocation of three CVD orders: for CTL plate from Sweden, CTL plate from France and SS sheet from France. In addition, positive results in other six cases, all in Italy, have been observed: G.O. Electrical Steel (14.25 percent to 1.07 percent), SS rod (CAS revoked, all others 13.85 percent to 1.28 percent), SS plate (15.6 percent to 1.62 percent), SS sheet: (AST 15.6 percent to 1.62 percent, all others 12.09 percent to 1.61 percent) and CTL plate (26.12 percent to 3.44 percent).
According to Mr. Pierce, the US and EU are using non-market economy antidumping methodologies. These methodologies are fictional and AD rates tend to be very high. However, they are not always high. As a result, the US has changed the rules and is now, along with Canada, taking countervailing duty cases against China.
China is having an affect on all steel trade cases, even those that do not include it. Countries under investigation usually argue that the market will be flooded with Chinese products in the event of antidumping duty implementation. It is observed that there is domestic vulnerability and third country market displacement. In addition, major PR efforts by US domestic mills are targeting China. Moreover, every national steel industry defense uses a China strategy, in terms of causal links, freight and exchange rates.
However, China is currently not very export-oriented. According to the 2007 figures, China exported 13.33 percent of its 2007 production, while Russia exported 37.53 percent, Japan 30.7 percent, EU27 10.46 percent and Brazil 28.4 percent - respectively, 65.2 million tons of 489.0 million tons, 36.9 million tons of 120.2 million tons, 22 million tons of 210.3 million tons and 9.2 million tons of 33.8 million tons.
Exports from China have also decreased because of the country's new export policies. China's VAT export rebates have been eliminated or slashed, export licenses have been implemented, and export taxes of five percent to 15 percent are imposed. The impact of these measures - overall Chinese steel exports went down by 48 percent in May-November 2007 year on year.
China's new capacity limitation measures are as follows: Small blast furnaces, converters and electric furnaces, and other obsolete production facilities, must be eliminated within five years. No new steel melting production facilities will be allowed in environmental protection areas, in regions subject to water shortages, or in urban areas. New steel manufacturing proposals must include energy conservation and environmental impact analyses, and must include electricity generation through surplus heat and energy. New steel facilities must attain reduced energy consumption levels not over 0.7 tons of coal in blast furnaces and 0.4 tons of coal in EAFs. Water consumption per ton of steel is to be lower than six tons in blast furnaces and three tons in EAFs, with 95 percent recycling. New steel production must meet pollutant discharge standards. New iron-making, steelmaking and steel-rolling projects require 40 percent up-front capital.