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CII team miffed over US trade measures on steel

Aziz Haniffa
India Abroad Correspondent in Washington

A high-powered Indian steel industry delegation visiting Washington has bitterly complained to senior Bush administration officials and Congressional leaders that the recent US action on steel imports from India could be the death knell for this sector in India, and leave more than 5 million workers out of work.

India, which is the 10th largest producer of steel in the world, exported 0.9 million tonnes of steel to the US in 2000.

The total exports of steel by India worldwide was about 3 million tons the same year.

US exports to India the same year was around 0.047 million tons, while the total steel imports into India from all sources was around 2.2 million tonnes in 2000.

The delegation, led by the Secretary, Ministry of Steel, NN Khanna, and comprising members of the Confederation of Indian Industry representing over 70 percent of the steel manufactured in India, warned recent US initiatives such as anti-dumping provision against India could adversely impact on US-India bilateral relations.

The delegation also complained about the discriminatory treatment meted out toward India and some other developing countries.

The delegation also pointed out the difference in approach toward Russia and Brazil that had been offered bilateral negotiations by the US in an attempt to alleviate their concerns, while India had been ignored.

The increasing number of anti-dumping action in the steel industry, according to the delegation, was leading to the closure of the US market for Indian steel even though the amount of Indian exports to the US was very small -- only 3 percent of the US exports.

As such, under normal WTO standards, anti-dumping action could have been avoided.

Delegation members said this could lead to serious concerns on the way the anti-dumping agreement is working particularly among developing countries and served notice to the Bush administration that if this continues, steel would necessarily become the next contentious issue in the World Trade Organisation negotiations.

The delegation had also made clear that exports from India were products that were manufactured based on orders from steel consumers in the US and not on a stock and sale basis.

The delegation had called on the US to discuss the matter on a bilateral basis so that the issue could be resolved 'in the best interest of both nations in the spirit of Indo-US cooperation and a long term solution to the issues facing the global steel industry could be found'.

But apparently, the Bush administration officials had not promised anything, communicating instead to the CII delegation that Washington's recent actions were part of a three-pronged approach initiated by President George W Bush himself and that the first step of the process -- a detailed investigation under provisions of the Trade Act -- was already underway.

The US officials had explained that as part of this process, the International Trade Commission would determine if there has been any substantial injury caused to the US steel industry by imports and that if it is found that such injury has been caused, certain remedies would have to be taken.

These, they had warned, could include increased tariffs, quotas or a combination of both.

The officials told the visiting delegation that the US proposed to initiate a discussion among steel producing nations, and invited India to be part of this dialogue.

The third part of this approach, according to the US officials was to discuss the trade distortion measures that exist worldwide.

Meanwhile, Khanna also complained that focusing solely on the investigative process of the US Trade Act and not progressing significantly on the other two parts of Washington's so-called three-pronged approach would result in a further distortion of trade in the long-term.

Khanna also said it was imperative that the US look inwardly at its own steel industry and the problems within it, implying that simply giving a sick industry protection from imports is not the way to go about in healing an ailing sector.

The discussions mooted by the trade delegation was expected to be continued next week when US Trade Representative Robert Zoellick visits India.

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