*EPF525 03/21/2003
Fact Sheet: U.S. Excludes More Steel Imports from Safeguard
(Announces also automatic adjustment of the measure) (1020)

The Commerce Department and the Office of the U.S. Trade Representative have announced a new batch of exclusions from the steel safeguard measure launched by President Bush in March 2002 and said that the measure was automatically adjusted to the levels set for the second year of the safeguard.

Following is the related fact sheet detailing both actions:

(begin fact sheet)

U.S. DEPARTMENT OF COMMERCE
AND
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
WASHINGTON, DC

MARCH 21, 2003

Fact Sheet: Exclusion of Products from
Safeguard on Steel Products and Automatic
Adjustment of the Remedy

Background on Review of Product Exclusion Requests

-- On March 5, 2002, the President decided to impose temporary safeguards on imports of steel products as a result of the Section 201 investigation of steel products.

-- The President instructed the USTR to complete its deliberations on exclusion requests pending at the time, and to consider new exclusion requests to be announced in March of each year in which the safeguard is in effect.

-- The USTR published preliminary procedures for the annual consideration of exclusion requests in the Federal Register on June 3, 2002. The USTR then published further procedures for the consideration of such requests in the Federal Register on November 19, 2002 and December 31, 2002.

-- Under these procedures, parties were required to submit product exclusion requests with the USTR and the Department of Commerce by December 10, 2002.

-- In November of 2002, the Department of Commerce and the USTR held a public meeting and teleconference to explain the exclusion process to small businesses and other consumers. The Department of Commerce and the USTR subsequently held a series of meetings beginning in February to discuss individual exclusion requests with both requesting and objecting parties.

Details of Product Exclusions Announced

-- Today's announcement will result in the exclusion of 295 products. A total of 661 exclusion requests were received.

-- Out of the 295 exclusion requests granted, 208 of those requests did not receive any objections from the domestic steel industry.

-- The products to be excluded cover a broad range of steel products (including plate products, hot-rolled products, cold-rolled products, corrosion-resistant products, tin mill products, pipe and tube, flanges and stainless steel products) from numerous countries. Many of the exclusions granted were for small-volume niche products.

-- The requests to exclude these products were submitted by U.S. steel consumers, as well as from foreign steel producers from a number of countries.

-- Exclusions were granted when the factual record showed that steel consumers were not able to obtain the required products for their needs because domestic mills do not currently produce the product in sufficient quantity and that no domestic product was available that could serve as a functional substitute. With respect to all exclusions that were granted, USTR and Commerce determined that granting the exclusion would not undermine the steel safeguard's relief.

-- In order to avoid undermining the effect of the steel safeguard remedy, many of these exclusions are subject to volume caps less than the amounts imported in 2001. Other than the exclusions subject to volume caps, the actual volume of imports covered by the exclusions will depend upon supply and demand in the steel market and end-user requirements.

-- A complete description of the excluded products will be published in the Federal Register by March 31, 2003.

-- A total of 727 products were also previously excluded from the safeguard last year.

Basis for Consideration of Product Exclusion Requests

-- Neither U.S. law nor our WTO obligations require excluding products from the safeguard on steel products.

-- The purpose of granting product exclusions is to ensure that U.S. steel consumers can obtain steel products that are not currently available in sufficient quantities from domestic sources.

-- The President also clearly stated that we would not grant exclusions that would undermine the steel safeguard.

-- These standards were the sole bases for judging each exclusion request case-by-case.

-- In analyzing exclusion requests, the Department and USTR considered: (1) whether the product is currently being produced in the United States; (2) whether substitution of the product is possible; (3) whether qualification requirements affect the requestor's ability to use domestic products; (4) inventories; (5) whether the requested product is under development by a U.S. producer who will imminently be able to produce it in marketable quantities; and (6) any other relevant factors.

-- We carefully considered all parties' information and, where necessary, actively consulted with them before determining whether to grant each exclusion request.

-- This was a difficult and technical process, requiring the analysis of an enormous amount of information regarding U.S. consumers' product needs and U.S. producers' production capabilities.

Annual Consideration of Exclusion Requests

-- The next round of consideration of exclusion requests will be initiated in November 2003 and completed by March 2004. The steel safeguard remedy is then scheduled to terminate in March 2005.

Adjustment of Steel Safeguard Remedy

-- In accordance with U.S statutory and World Trade Organization requirements, the steel safeguard remedy was automatically adjusted on March 20, 2003 to the levels prescribed in the President's March 5, 2002 proclamation.

-- The remedy was adjusted as follows:

Product..........Remedy Until March 20 Remedy as of March 20
2003 2003

Flat Products: Slab
5.4 million short tons 5.9 million short tons
tariff rate quota with over tariff rate quota with over
quota tariff of 30 percent quota tariff of 24 percent

Flat Products: Plate, Hot-rolled Steel, Cold-rolled Steel, Coated Steel

30 percent tariff 24 percent tariff

Tin Mill Products
30 percent tariff 24 percent tariff

Hot-rolled Bar 30 percent tariff 24 percent tariff

Cold-finished Bar
30 percent tariff 24 percent tariff

Rebar 15 percent tariff 12 percent tariff

Welded Pipe & Tube
15 percent tariff 12 percent tariff

Carbon/Alloy Flanges & Fittings
13 percent tariff 10 percent tariff

Stainless Steel Bar
15 percent tariff 12 percent tariff

Stainless Steel Rod
15 percent tariff 12 percent tariff

Stainless Steel Wire
8 percent tariff 7 percent tariff

-- The remedy will be likewise adjusted again in March 2004.

(end fact sheet)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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