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Foreign policies hurting US metals: USTR

Keywords: Tags  USTR, foreign trade, aluminum, steel, raw materials, iron ore, export restrictions, Ron Kirk catherine ngai

NEW YORK — A number of trading partners’ export restrictions, quotas and foreign policies are hurting U.S. trade opportunities as well as the domestic metals industry, according to a new government report.

"Recognizing that U.S. economic and employment recovery and growth continue to rely importantly on the strength of U.S. exports of goods, services and agricultural products, we will be redoubling our efforts to ensure that the technical barriers that inhibit those exports are steadily diminished," U.S. Trade Representative Ron Kirk said in releasing the report.

The third annual report by the USTR highlights in particular the importance of reducing barriers to encourage fair trade with rapidly developing nations like China, Brazil, India and Russia.

One major area of concern laid out in the report is policy surrounding China’s steel sector, including restrictions on exports of raw materials, significant challenges to foreign ownership and problems with oversupply.

"Despite China’s stated goal of eliminating inefficient steel capacity, and despite slowing growth in domestic steel demand and stagnant demand in export markets, steel production in China in 2011 continued to grow, reaching a record 695.5 million tonnes in 2011, an 8.9-percent increase over 2010," the USTR report said.

China’s tiered export tax brackets to encourage the export of certain value-added steel products over raw materials also is a concern, the USTR said.

Export restraints on iron ore from India also raise concerns for the United States, especially following India’s policy change earlier this year to double the export duty to 30 percent, the USTR said. "India also requires that exports of high-grade iron ore (greater than 64 percent iron content) pass through state trading enterprises, with state-owned Minerals & Metals Trade Co. acting as a clearinghouse. . . . It appears the Indian government is using these measures to improve supply and lower prices of inputs used by India’s rapidly growing steel industry."

Other concerns include Brazil’s tax breaks to exporters, including heavy agricultural machinery manufacturers and automotive producers. Argentina also has preferential import procedures that affect flat-rolled and tube products, it said.

Russian trade policy also remains a concern, particularly due to its floating export duty rates linked to the London Metal Exchange’s nickel price, the report said, noting that Russia has pledged to eliminate a number of its export duties, including those on nickel, copper and aluminum, within four years of joining the World Trade Organization.

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