Statement to the ITC determination (by Akira Chihaya， Chairman， The Japan Iron and Steel Federation

NEW YORK ‐ The Japanese steel industry is extremely disappointed in the International Trade Commission’s ruling that the U.S. steel industry has been seriously injured by imports. This ruling will provide unfair protection to the U.S. industry.

Japanese steelmakers， through submissions of briefs and economic data， clearly showed that the real cause of the problems of the U.S. steel industry is not imports. Rather， a combination of factors， including (1) expansion of finishing capacity by U.S. mills in excess of domestic demand； (2) increased price competition among integrated mills and also between integrated mills and mini-mills； (3) decreased demand from major sectors， including the automotive industry； and (4) extremely burdensome legacy costs borne by U.S. integrated mills.

Despite these submissions， the ITC determined that 16 out of 33 products caused injury. Of this group， there were four products placed on the affirmative list as a result of a tie vote. These 16 products account for approximately 82 percent of total import volume from various countries， including Japan. No basis whatsoever for these determinations was presented. We are deeply concerned that these findings will have serious adverse affects not only on steel exporting countries but also on U.S. steel consumers. It appears that the ITC has yielded to protectionist pressures applied by U.S. steel mills and that is a great disappointment.

The facts clearly show that import volume of flat-rolled products ‐ which account for more than one-half of all imports ‐ have significantly decreased since the 1998 peak period. Moreover， most of these products had already been subject to anti-dumping measures.

Despite this situation， the ITC found all flat-rolled products， except grain-oriented electrical sheet， to be causing injury. We cannot understand the ITC’s justification for this determination.

Cold-rolled steel is an exceptional example. Just last March， the ITC made a negative determination of imports from six countries， including Japan， in an anti-dumping investigation and found that no damage had been caused to the domestic steel industry. And only last November， the ITC found that imports from Korea， Germany and the Netherlands were causing no injury during the sunset review for cold-rolled imports.

The ITC determination is also quite problematic in light of WTO rules， not only because imports from Mexico and Canada were treated separately， but also because the ITC combined a number of products ‐ slabs， plates and sheets - into a single like category for the purposes of injury determination.

We understand that the ITC recommendations for remedies are scheduled to be issued in late December and that a Presidential decision is anticipated in February. The Japanese steel industry is determined to make arguments that most of its imports are specialty products that are either not available in the U.S. or not produced in sufficient quantities to satisfy American steel consumers. We will seek exclusions for such specialty products from any remedy. We will also further argue for moderation in any U.S. response to such recommendations.