Saturday, August 23, 2014

South Korea Found Guilty Of Illegal Dumping In U.S. Markets-- Who Could Have Guessed!


Last week, we looked at the continuing saga of NAFTA and other so-called "free trade" agreements on America's deteriorating standard of living. One of the most recent of those new agreements-- October, 2011-- was the Korea Trade Agreement. For all the knee-jerk obstructionism offered by congressional Republicans for any and all Obama proposals, the vote on this bill was very different. It passed 278-151, 219 Republicans and 59 mostly Big Business-owned conservative Dems voted for it, and 130 Democrats and 21 Republicans voting against it. The roster of Democrats on board for this destructive, anti-worker bill reads like a roster of the New Dem caucus:
Jim Clyburn (SC)
Jerry Connolly (VA)
Joe Crowley (NY)
Susan Davis (CA)
Norman Dicks (WA)
Colleen Hanabusa (HI)
Jim Himes (CT)
Jay Inslee (WA)
Ron Kind (WI)
Rick Larsen (WA)
Sean Patrick Maloney (NY)
Gregory Meeks (NY)
Jim Moran (VA)
Bill Owens (NY)
Jared Polis (CO)
Mike Quigley (IL)
Cedric Richmond (LA)
Steve Rothman (NJ)
Loretta Sanchez (CA)
Adam Schiff (CA)
Kurt Schrader (OR)
Allyson Schwartz (PA)
Terri Sewell (AL)
Adam Smith (WA)
Debbie Wasserman Schultz (FL)
So how's it been going? Predictably terrible. Last year the Alliance for American Manufacturing reported that a year after implementation the "free frade" agreement with South Korea was proving as harmful as people feared it would be.

According to an analysis by the United Steelworkers (USW), U.S. car sales to South Korea increased by a mere 942 vehicles-- from 4,184 to 5,126.  Meanwhile South Korean companies sold more than 1.26 million cars in the U.S. in 2012 alone.

Imports of passenger vehicles from South Korea totaled $10.9 billion in 2012, up from $9 billion the year before-- a $1.9 billion increase, while U.S. exports increased a tiny $180 million to $546 million.

Overall, the total U.S. trade deficit with South Korea grew faster during the first nine months that the FTA was in place-- than during the entire year.

Bottom Line: There must be benefits to open trade. Unfortunately, it looks like the U.S. has gotten the short end of the stick. Issues like currency manipulation must be addressed.

It’s hard enough to open closed markets like those of South Korea and Japan. But allowing countries to manipulate currency makes it even harder.
But currency manipulation isn't the only instance where the South Korean are guilty of massive cheating that is costing American jobs. Yesterday, the International Trade Commission voted 5-0 found that South Korean companies are dumping Oil Country Tubular Goods (OCTG) into the U.S. market at prices below fair value and in deceptive ways designed to circumvent international trade laws. These pipes are made exclusively to be exported since Korea has no domestic oil drilling and therefore no domestic market for OCTG pipe.

Scott Paul, president of the Alliance for American Manufacturing congratulated the ITC for their ruling. "Steelworkers and manufacturers have clearly suffered. We hope this decision will boost the prospects for steel jobs and companies in this important market serving America’s energy independence efforts. It’s a shame that so much damage has to be done before America’s workers and companies can secure a level playing field. That needs to change, and it’s one thing AAM will be working toward as we move forward… The vote is a big victory for American manufacturing. It will help level the playing field for our steelmakers and steelworkers, who were forced to play by a different set of rules against products that were heavily subsidized and priced below fair value. Unfair trade contributed to layoffs in places like Lorain, Ohio and idled plants in Bellville, Texas and McKeesport, Pennsylvania. The ITC’s ruling will give steelmakers and workers a fair chance to compete in a strong market for the steel tube used to extract oil and natural gas."

This victory comes in the wake of a very strong letter Sherrod Brown and 56 allies sent to Obama's mobster Secretary of Commerce, Penny Pritzker:
We write to express our concerns with the Commerce Department’s preliminary determination in the antidumping investigation of Oil Country Tubular Goods (OCTG) imports from Korea. This case has nationwide economic implications, and any final determination must be based on accurate data and objective methodologies. As the Department continues the investigation, we ask that you fully consider the domestic industry’s allegations and take action against any unfair dumping to the fullest extent of the law.

Steel produced for the U.S. energy market, such as OCTG, accounts for approximately ten percent of domestic steel production, and U.S. OCTG producers employ nearly 8,000 workers across the country. Each one of those jobs, in turn, supports another seven jobs in the OCTG supply chain. U.S. demand for OCTG products has been rising, but our U.S. producers are increasingly losing sales to foreign competitors.  Imports of OCTG have doubled since 2008 and increased by 61 percent thus far in 2014 compared to the previous year. By some measures imported OCTG products account for more than 50 percent of the pipes being used by companies drilling for gas and oil in the U.S.  One steel company has already reduced hours at three American facilities and idled another as a result of growing OCTG imports. We have been told that more reductions and layoffs could occur.

Korea has one of the world’s largest steel industries but no domestic OCTG market.  The result is that Korean producers are exporting an increasing volume of OCTG to the United States. We ask the Department to closely verify and further analyze the information submitted by the Korean producers to ensure its accuracy. We are concerned that certain information used for the preliminary determination did not fully reflect the costs of production and sales for the Korean producers, such as profit information based on lower valued pipe products and certain affiliation issues that may impact which sales are used as the basis for the dumping calculation. As this case proceeds, we urge you to ensure that the Department’s investigation is objective and accurate.

The discovery and production of shale gas in the United States is a strategic benefit for both America’s economic and energy security. Addressing unfairly traded imports is essential to ensuring that U.S. OCTG producers have a level playing field on which to compete. Strict and full enforcement of our trade laws is essential for the future of this important industry, its workers, and steel communities throughout the country.

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