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WTO decision draws mixed reviews

Keywords: Tags  World Trade Organization, WTO, China, India, steel, seamless pipe, countervailing duties, Commerce Department trade investigation

NEW YORK — The World Trade Organization (WTO) panel rulings on China, India and the U.S. trade investigation system has drawn mixed reactions from industry observers.

The WTO found that Indian steelmakers did not benefit from some government subsidies (, July 14).

The rulings question and potentially undermine the right of the U.S. government to retaliate against subsidy-backed imports into the country, the American Iron and Steel Institute (AISI) said.

"Foreign government subsidization of steel production in countries like India and China has led to massive global overcapacity and repeated surges of unfairly traded imports into the U.S. market, injuring U.S. steel producers and their workers," AISI president and chief executive officer Thomas J. Gibson said in a statement. "AISI is therefore concerned anytime a WTO dispute settlement panel calls into question the ability of the U.S. government to exercise its rights under the WTO agreements to countervail imports benefitting from such subsidies."

AISI has not yet reviewed all the details of the two separate WTO rulings, one of which questions U.S. Commerce Department claims about Indian subsidies benefitting Indian steelmakers.

The other ruling involves a complaint China filed against the U.S., alleging that Commerce’s trade investigations and findings were flawed in 17 countervailing subsidy investigations from 2007 to 2012.

AISI will work with the U.S. Trade Representative’s Office and Commerce to ensure that U.S. trade laws remain "strong and strictly enforced," Gibson said.

The two rulings also show that the United States is out-of-touch with trade and treaty standards in the international community, one trade attorney claimed.

The United States has historically shied away from addressing the "politically sensitive" topic of how it calculates and implements duties even though U.S. practices "lack credibility because they are against the international rules," Lewis E. Leibowitz, a lawyer at Washington-based Hogan Lovells US LLP and counsel for the Consuming Industries Trade Action Coalition (Citac), told AMM. "Commerce is often reluctant to accept and implement WTO decisions."

The WTO decisions mean that, for the time being, the United States is a "scofflaw" in terms of its international trade obligations, Leibowitz said, noting that it may be years before the U.S. acts to address the agency’s concerns.

High subsidy and anti-dumping duties imposed by the United States are made worse by retroactive collection, Leibowitz said, which makes for "intolerable uncertainty" for any involved companies.

The United States will likely appeal the WTO’s decision to the group’s seven-member appellate body in Geneva within about two months, one source familiar with the matter said, adding that the appeal might then take another three to four months.

"So we’re six months from knowing what this really means," the source said.

The WTO’s appellate body can uphold, modify or reverse the legal findings and conclusions, according to the organization’s website.

Michael Cowden, Chicago, contributed to this article.

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