Brazil Rejects U.S. Anti-Dumping Ruling On Steel, May Go To WTO

2 August 2016

Brazil will wait for the U.S. International Trade Commission to rule on a Department of Commerce anti-dumping determination on its cold-rolled steel before appealing to the World Trade Organization, a senior Brazilian official said on Monday.

The Commerce Department said last week that Brazilian cold-rolled steel was being subsidized by seven export promotion programs in Brazil and passed its anti-dumping determination to the ITC to rule whether there is injury to U.S. producers.

That could lead to countervailing duties of up to 11 percent on cold-rolled steel exported to the United States. That trade, worth $285 million in 2015, is dominated by two Brazilian companies, Cia. Siderúrgica Nacional SA and Usinias Siderurgicas de Minas Gerais SA, a trade valued a $285 million in 2015.

The U.S. case targets Brazilian incentive programs that include the so-called "ex-tarifario" and drawback regimes that reduce import taxes on machines and inputs for making steel.

"Never before in the history of Brazilian foreign trade has anyone questioned the 'ex-tarifario' and drawback programs," Brazil's undersecretary of foreign trade, Daniel Godinho, told Reuters by telephone.

Godinho said the "ex-tarifario" program actually benefits U.S. machinery makers, the second most important source of capital goods imported by Brazilian industry, while the drawback program was used by all countries, under a "golden principle" of international trade that you do not export taxes.

"We disagree with the determination and we will wait for the ITC decision, which we expect in September, before deciding what we will do," he said.

Brazilian cold-rolled steel is mostly exported for the auto and appliances industries but it is also used for a wide variety of products that require high strength such as steel bars and rods. With the current global economic slowdown, supply of the product exceeds demand and producers are fighting to protect their businesses from steel being sold below market prices.

Brazil is vulnerable to dumping charges because steel is often sold at above world prices in its domestic market meaning exports can cost less.

Another U.S. anti-dumping investigation is looking at Brazilian hot-rolled steel exports to the United States, which were worth over $1 billion last year.


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