*EPF312 03/21/01
USITC Recommends Extending Wheat Gluten Import Quotas
(Antidumping duties rejected for steel wire rope) (530)
By Bruce Odessey
Washington File Staff Writer

Washington -- The U.S. International Trade Commission (USITC) has voted to recommend extension of import quota protection for the U.S. wheat gluten industry, protection that a World Trade Organization (WTO) dispute-settlement panel has already ruled illegal.

The commissioners voted 6-0 March 21 that the industry qualifies under Section 201 of U.S. trade law for continued protection -- in part because import threats to the industry continue, in part because the industry has taken required steps for restructuring.

President Bush must decide whether to continue the quotas; under Section 201 he can follow all or some or none of the USITC recommendations. Without action the three-year quota protection will lapse in June. The law authorizes protection for up to eight years.

Section 201 does not require a finding of unfair trade practices. Instead a domestic industry can petition under the provision for temporary import relief from a surge of fairly traded imports. Any tariff or quota or other protection granted by the president requires all protected companies in the industry to carry out restructuring.

The WTO's Appellate Body ruled in December in a case brought by the European Union (EU) that aspects of U.S. wheat gluten protection under Section 201 violate the WTO Safeguard Agreement. The Office of the U.S. Trade Representative (USTR) announced at a February meeting of the WTO Dispute Settlement Body that it would implement the ruling, but would need a reasonable period of time to do so.

Already in January, however, the EU had imposed retaliatory tariffs -- five euros per ton -- on imports of U.S. maize gluten. USTR has charged that this retaliation itself violates WTO rules and has formally asked for consultations with the EU, the first step in WTO dispute-settlement proceedings.

U.S. wheat gluten producers want Bush to extend the quotas, but U.S. maize gluten producers want them halted.

In the meantime, U.S. Trade Representative Robert Zoellick requested by letter earlier in March that the USITC quickly issue an advisory opinion on whether the commission can make recommendations in this case consistent with the WTO ruling.

In other action March 21, the USITC commissioners voted 6-0 against imposing antidumping duties on imports of steel wire rope from India and China, finding insufficient injury or threat to the U.S. industry.

Imposition of antidumping duties requires final affirmative determinations both from the Department of Commerce on dumping and from the USITC on injury.

In February the Commerce Department made a final affirmative determination that dumping had occurred, calculating dumping margins up to 58 percent for China and 38 percent for India.

The department found that imports of steel wire rope from Malaysia were not dumped on the U.S. market, however.

Dumping is the import of goods at a price below the home-market or a third-country price or below the cost of production. A dumping margin is the ratio of the dumped price to the fair-value price.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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