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AISI's Gibson counsels caution on TPP talks

Keywords: Tags  steel, AISI, American Iron and Steel Institute, trade agreements, TPP, Trans-Pacific Partnership, Tomas J. Gibson, state-owned enterprises trade litigation

SÃO PAULO — U.S. steelmakers should be wary of advanced negotiations for the Trans-Pacific Partnership (TPP), particularly when certain issues—such as those involving countries with state-owned enterprises—may in turn hurt domestic players.

"We’re seeking strong provisions in the TPP with regard to disciplines involving state-owned enterprises and currency," Thomas J. Gibson, president and chief executive officer of the American Iron and Steel Institute, told AMM on the sidelines of the World Steel Association annual conference in São Paulo.

"We’re not TPP proponents, but we’re saying if you’re going to have TPP, make sure you take care of these issues. We have to make sure there are remedies for state-owned enterprises if they act in non-market ways," Gibson said.

In 2009, President Obama announced the United States’ intention to participate in the TPP, which would create a trade partnership with 12 Asia-Pacific players, including Australia, Japan, Vietnam and Malaysia. After years of negotiations, the administration has said it aims to wrap up the trade pact by year-end.

Some steel advocates have called TPP the "gold standard" that will set the bar for future trade agreements, particularly those involving China, while others are hesitant to recognize its advantages.

In the meantime, the U.S. government is also in trade discussions with the European Union over another agreement. Gibson said, however, that since there are no tariffs on steel with regard to Europe and the United States, there is "arguably no effect to steel."

Trade has been an important topic for the U.S. industry this year, particularly after steelmakers filed a number of high-profile cases involving reinforcing bar as well as oil country tubular goods.

"The reason why you’re seeing trade cases this year is because the surge of imports really occurred 18 months ago. That’s the nature of a trade case—you have to build a case and it’s based on data that’s always goingto lag," Gibson said. "Since 2010, we’ve seen a real spike in imports, and they’ve remained at elevated levels through 2012-2013, including products like corrosion-resistant rebar, line pipe and hot-rolled bar."

Gibson added that while trade laws aren’t meant to "cut out" countries from the United States, the goal is to ensure that international rules are followed.

"Overcapacity in the world is still a concern to us," he said. "This is the most open market in the world and we couldn’t close it even if we wanted to."

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