Trends In International Litigation : International Business Lawyer & Attorney : Ed Joffe : Joffe & Joffe Law Firm : Miami, Florida Global Customs & Trade Issues

The United States International Trade Commission today determined that a U.S. industry is materially injured or threatened with material injury by reason of imports of certain oil country tubular goods from China. U.S. Department of Commerce has determined these goods are subsidized .

 Kris Maher at andHenry J. Pulizzi at the Wall Street Journal Online report that this steel-pipe case is the ITC's biggest ever by dollar amount, and comes as the world's recession and overall drop in demand for steel products has caused steelmakers to fight for a smaller pool of customers Imports of so-called oil country tubular goods from China, totaled $2.8 billion in 2008.The Chinese government can appeal Wednesday's decision to the World Trade Organization, and Chinese steelmakers can appeal to a federal district court in New York that handles trade cases.
Daniel Porter, a Washington attorney representing the Chinese exporters, said a decision on whether to appeal could be made in several weeks, once a detailed ruling by the ITC explaining the rationale for its decision is made public. "We are obviously disappointed," Mr. Porter said. Chinese steelmakers argued that the U.S. industry is trying to stymie legitimate competition and wasn't injured by the imports. They note the U.S. steel industry was making record profits, especially in 2008, when selling pipe and tube to energy and exploration countries, and argued that Chinese imports increased to meet demand in the U.S. "It's hard to see how those imports caused injury," Mr. Porter said.
John Surma, CEO of U.S. Steel Corp., said he was "pleased" with the ITC's ruling on Wednesday. "This enormous surge of unfairly traded goods resulted in an overhang of inventory that crippled the domestic industry."
 

Pittsburgh-based U.S. Steel and seven other domestic producers, along with the United Steelworkers, filed a trade complaint in April against Chinese producers and exporters, claiming China's government was subsidizing pipe-production costs.
 

The United Steelworkers, which has been actively involved in filing trade cases and was the driving force in the tire case, said the decision would enable companies to bring back laid off workers. "Today's vote by the trade commission makes it clear to American pipe workers and industry that the U.S. government will stand up against China's violation of fair trade rules," said Leo Gerard, the union's president.

The ruling, which will likely result in duties of between 10% and 16% on future imports of Chinese steel pipes used to drill for natural gas and oil.

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I wanted to pass on some thoughts of Thomas L. Friedman, an OpEd Columnist with the New York Times. Last summer, while attending a talk by Michelle Rhee, the chancellor of public schools of Washington, DC, Friedman met Todd Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. Martin opined that the topic about which Rhee was to speak— our struggling public schools — was actually a critical, albeit unspoken reason for the Great Recession.
“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.” This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.
 

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