WTO favors U.S. in Chinese electrical steel dispute

   The World Trade Organization Appellate Body on Thursday found in favor of the United States in a dispute challenging China’s imposition of duties on U.S exports of grain oriented flat-rolled electrical steel (GOES).
   A WTO panel agreed with the United States that China had acted inconsistently with its WTO obligations in imposing the duties. The appellate body, in turn, rejected all of China’s claims on appeal.
   “American manufacturers and workers can compete and win on a level playing field, but China’s unfair duties choked off nearly all U.S. GOES exports to its market,” said U.S. Trade Representative Ron Kirk, in a statement. “Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of U.S. products.”
   GOES is a high-tech, high-value magnetic specialty steel that is used mostly by the power generating industry in transformers, rectifiers, reactors, and large electric machines. In the United States, GOES is manufactured by AK Steel Corp. in Ohio and Pennsylvania’s Allegheny Ludlum.
   On June 9, 2009, China initiated separate antidumping and countervailing duty investigations on GOES from the United States. On April 10, 2010, China’s Ministry of Commerce issued final determinations of dumping, subsidization, and injury, along with a notice of imposition of antidumping and countervailing duties. China’s determination of injury applied equally to both the antidumping and countervailing duty investigations.
   On Sept. 15, 2010, the United States requested dispute settlement consultations with China concerning its imposition of these duties on GOES from the United States. After consultations failed to resolve the matter, the WTO established the panel in March 2011.
   In 2008, U.S. exports of GOES to China were valued at $270 million. By 2011 those exports had fallen to less than $3 million.
   The United States alleged that China improperly initiated its countervailing duty investigation of several U.S. laws. The United States also challenged the manner in which China conducted its investigation, alleging China violated numerous procedural and due process obligations, impairing the ability of the United States and U.S. companies to defend their interests. In addition, the United States alleged China’s finding of injury to its domestic industry was unsupported by the evidence on the record. A WTO panel sided with the United States in a report circulated in June 2012.