U.S.`s Steel Damage Probe is Likely to Hit Korea`s Exports

The U.S. Trade Representative (USTR) officially requested the U.S. International Trade Commission (ITC) to launch the investigation on the damage of the U.S.`s steel industry derived from the imports of foreign steel products, on 22nd. Following the U.S.`s aggressive action, the `steel war` has been heated between the major steel exporting countries including Korea and the U.S. for at least 8 months.

According to the Korea International Trade Association (KITA) and the Ministry of Commerce, Industry and Energy (MCIE) yesterday, Robert Zoellick, the representative of the USTR, requested the ITC to probe the industrial damages of 512 items in 4 steel product groups such as boards products, certain carbon and alloy long products, steel tubes, and stainless steel products under section 201

An official of the KITA told that ``the items that the USTR requested to investigate occupy 98 percent of total steel products, and over 95 percent of Korea`s exporting steel items will be under the damage investigation``.

The ITC who received the official request for an investigation from the USTR will first evaluate the damage of the U.S. steel industry by October 21st, and then will submit to President George W. Bush the proposition for the rescue measures by December 21st. If President Bush accepts the proposition, the U.S. government will take the concrete retaliatory measures such as raising the customs, setting up the import quota, and the imposition of customs including the quota until Feb. 21 next year.

The KITA decided to deliver the Korea`s position in details through the close consultation with the MCIE and the Korea Iron and Steel Association (KOSA). It will response to the U.S.`s measures jointly with Japan and the EU in the steel committee of the Organization for Economic Cooperation and Development (OECD) which will be held on September in France. And the KITA is reviewing the plan to file a suit to the World Trade Organization (WTO) in case that the `safeguard` is actually put in motion.

The KOSA anticipated that the amount of the steel exports will decrease 1 million t (42 percent) from the last year, if the U.S. executes the import quota on the basis of the standards which had been valid for three years before 1997.

Korea exported 2.35 million t of steel products, amounting to $1 billion 32 million to the U.S..

Kim Sang-Chul sckim007@donga.com