Emergency Signal on Korean Steel Exports to U.S.

The United States International Commission (ITC) ruled on Oct. 22 (local time) that American steel makers had suffered serious injury from imported steel products, and thus declared `industrial damages` in piles on U.S. steel.

If the U.S. imposes restrictions on steel imports, then trade conflicts seem to increase between the U.S. and its major steel supplying countries, including Korea, Japan and the European Union (EU).

The Korean government expressed its concern about the ITC ruling, and decided to maximize damages on the domestic steel industry by negotiating with the U.S. as well as by collaborating with such major steel suppliers to the U.S. as Europe and Japan.

ITC ruled on that day, ``As a result of an inquiry in accordance with Section 201 of the trade act, 16 items out of 33 imported steel products were found to have damaged domestic U.S. steel industry.``

The 16 items that received the declaration of a `industrial damage` includes △ six plate products, including back-plates, hot-rolled steel plates and slabs △ five stainless and tool steel products, including bars, rods and wires △ three bar-type products, including iron bars △ two steel pipes, including welded steel pipes and seamless pipes.

The Korean steel industry is expected to face a serious blow because the 14 items, excluding slab and cold-rolled rods, are Korea`s major steel products exported to the U.S.

ITC said that among items under the investigation 17 products, including electric steel plates and H-type steel wires, were found harmless to the U.S.

ITC will hold a hearing on Nov. 5 to collect opinions of the U.S. and overseas steel industrial circles on the basis of this ruling and will work out `rescue measures` for rectifying damages on the U.S. steel industry to report to President George W. Bush by Dec. 19. President Bush will then examine those measures and decide upon final rescue measures like imposing a import quota or tariff by Feb. 19 of next year.

Concerning the ITC ruling of `industrial damages`, Ministry of Commerce, Industry and Energy released a statement by the name of Minister Chang Jae-Sik and pointed out, ``The ITC ruling has turned down the expectations from many countries, including Korea, and may impose a serious impact on free and rightful steel trades. In addition, it can be followed by successive restrictions upon major steel suppliers, which will lead to prolonged economic slump of world steel industrial countries.``

Ministry of Commerce, Industry and Energy and Ministry of Foreign Affairs and Trade have decided to cope with the U.S. actively, while to file a complaint with the World Trade Organization in collaboration with EU and Japan if the U.S. virtually presses the import restrictions (safeguard).

Korea Iron and Steel Association criticized, ``It is not right to attribute the sufferings of the U.S. domestic steel industry, caused by the weakening of its competitiveness, to imported steel products.`` and decided to take legal steps such as filing a complaint with WTO after discussing with the government.

Han Ki-Heung eligius@donga.com