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WTO Rejects Bulk of China’s Case on U.S. Steel Duties

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Oct. 22 (Bloomberg) -- World Trade Organization judges rejected eight out of 11 complaints by China against U.S. duties on imports of steel pipes, some off-road tires and woven sacks.

The U.S. announced levies in July 2008 on $200 million of steel pipe shipments from China, South Korea and Mexico. Chinese exporters of the light, rectangular piping face countervailing duties, used to offset subsidies, of as much as 200 percent of the product’s price and anti-dumping duties, which compensate for goods sold overseas at prices below those at home, of as much as 265 percent.

Judges today upheld the right of the U.S. to impose both sets of tariffs on the Chinese products, the U.S. Trade Representative’s office said in a statement. It’s the second time the U.S. has imposed duties on Chinese imports to compensate for subsidies, after a similar case in June 2008 involving a different type of steel pipe.

“This was a major victory for the U.S.,” said Alan Price, a lawyer at Wiley Rein LLP in Washington who has represented Nucor Corp. in trade cases. “The WTO panel affirmed the right to apply the antidumping- and countervailing-duty law simultaneously to China, the panel affirmed the Commerce Department’s findings that state-owned enterprises are public bodies entrusted and directed by the government and the WTO affirmed the use of non-Chinese benchmarks in subsidy cases.”

No one was available at China’s mission to the WTO in Geneva to comment on the ruling.

Judges agreed with China, the world’s biggest steel producer, that the duties themselves weren’t compliant because one element ran counter to WTO rules.

“We recommend that the United States bring its measures into conformity with its obligations” under the Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade, the judges said in their 283-page report published today on the WTO’s website.

Both China and the U.S. have 60 days to appeal the decision.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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