873 F.Supp. 673 (CIT. 1994), 93-09-00564, United States Steel Group-A Unit of USX Corp. v. U.S.
|Docket Nº:||Court No. 93-09-00564-INJ.|
|Citation:||873 F.Supp. 673|
|Party Name:||UNITED STATES STEEL GROUP--A UNIT OF USX CORPORATION; AK Steel Corp.; Bethlehem Steel Corporation; Geneva Steel; Gulf States Steel, Inc. of Alabama; Inland Steel Industries, Inc.; LTV Steel Company, Inc.; Laclede Steel Company; National Steel Corporation; and WCI Steel, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Pohang Iron & Steel Co., Ltd|
|Case Date:||December 30, 1994|
|Court:||Court of International Trade|
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Dewey Ballantine, Alan Wm. Wolff, Michael H. Stein and Linda C. Menghetti, and Skadden, Arps, Slate, Meagher & Flom, Robert E. Lighthizer, John J. Mangan, Stephen Narkin, Barry Gilman and M.J. Mace, Washington, DC, for plaintiffs.
Lyn M. Schlitt, Gen. Counsel, U.S. Intern. Trade Com'n, James A. Toupin, Deputy Gen. Counsel, Kathryn A. Gilchrist, Scott D. Andersen and James M. Lyons, Washington, DC, for defendant.
Morrison & Foerster, Donald B. Cameron, Alan K. Palmer and Neal J. Reynolds, Washington, DC, for defendant-intervenor Pohang Iron & Steel Co., Ltd.
Arent Fox Kintner Plotkin & Kahn, Stephen L. Gibson, for defendants-intervenors Preussag Stahl AG, Klöckner Stahl GmbH, Krupp Hoesch Stahl AG, Friedrich Krupp AG Hoesch-Krupp and Thyssen Stahl AG.
Hogan & Hartson, Mark S. McConnell, for defendant-intervenor Algoma Steel Inc.
O'Melveny & Myers, Bruce R. Hirsh, Gary N. Horlick, for defendants-intervenors Sidmar N.V. and TradeARBED, Inc.
Paul, Weiss, Rifkind, Wharton & Garrison, George Kleinfeld, for defendant-intervenor IPSCO Inc.
Powell, Goldstein, Frazer & Murphy, Peter O. Suchman, Neil R. Ellis and Elizabeth C. Hafner, for defendants-intervenors Hoogovens Groep BV and N.V.W. (U.S.A.), Inc.
Rogers & Wells, William Silverman and Carrie A. Simon, for defendant-intervenor Dofasco, Inc.
Weil, Gotshal & Manges, A. Paul Victor and Martin S. Applebaum, for defendants-intervenors Usinor Sacilor and Sollac.
M. Jean Anderson and Bruce H. Turnbull, for defendant-intervenor USS-POSCO Industries.
Willkie Farr & Gallagher, William Barringer, Matthew R. Nicely, Nancy A. Fischer and James Durling, for defendants-intervenors NKK Corp., Kobe Steel, Ltd., Nippon Steel Corp., Nisshin Steel Co., Ltd., Sumitomo Metal Industries, Ltd., Kawasaki Steel Corp., Usinas Siderurgicas de Minas Gerias, S.A.
Christopher A. Dunn and Edmund W. Sim, for defendant-intervenor Stelco, Inc.
Dickstein, Shapiro & Morin, Arthur J. Lafave III and Douglas N. Jacobson, for defendant-intervenor Companhia Siderurgica Nacional.
This matter is before the court on plaintiffs' motion for judgment on the agency
record, challenging the United States International Trade Commission's ("ITC" or "the Commission") negative material injury determination with respect to certain hot-rolled steel products from Belgium, Brazil, Canada, France, Germany, Japan, Korea and the Netherlands that were found to be subsidized or sold at less than fair value ("LTFV"). Certain Flat-Rolled Carbon Steel Prods. from Argentina, Australia, Austria, Belgium, Brazil, Canada, Finland, France, Germany, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Poland, Romania, Spain, Sweden, and the United Kingdom, USITC Pub. 2664, Inv. Nos. 701-TA-319-332, 334, 336-342, 344, and 347-353, and Inv. Nos. 731-TA-573-579, 581-592, 594-597, 599-609, and 612-619 (Aug. 1993) (final determ.) (" Final Det. "); 58 Fed.Reg. 43,905, 43,906-07 (USITC 1993). In that determination, a majority of the ITC Commissioners 1 found that the United States industry was not materially injured or threatened with material injury by reason of LTFV sales of hot-rolled carbon steel. 2
Plaintiffs U.S. Steel Group, AK Steel Corp., Bethlehem Steel Corp., Geneva Steel, Gulf States Steel Inc. of Alabama, Inland Steel Industries, Inc., LTV Steel Company, Inc., Laclede Steel Company, National Steel Corp., and WCI Steel, Inc. (collectively "Petitioners") are U.S. manufacturers of hot-rolled carbon steel products. Hot-rolled steel is employed in the construction, automotive, machinery and equipment industries. U.S. Int'l Trade Comm., Certain Flat-Rolled Carbon-Steel Products: Final Report to the Commission at I-34 (1993) ("Pub. Staff Rpt."). Most hot-rolled products are either used internally or transferred to an affiliated company for use in the manufacture of cold-rolled sheet and strip, or welded pipe. Pub. Staff Rpt. at I-34; Final Det. at 15. At oral argument, petitioners stated that a percentage of hot-rolled steel is also employed as substrate in the manufacture of corrosion-resistant steel. Approximately two-thirds of the domestic hot-rolled steel produced is "captively consumed" in the production of "downstream" products. Final Det. at 15 n. 37. The remainder represents hot-rolled steel sold to the open market. See id. at 15.
On August 18, 1993, ITC gave notice of its final negative antidumping duty determination. ITC found that: a/ LTFV imports from Belgium, Brazil, Canada, France, Germany, Japan, Korea and the Netherlands did not cause or threaten material injury to the U.S. industry, and b/ subsidized imports from Belgium, Brazil, France, Germany and Korea did not cause or threaten material injury. Id. at 9; 58 Fed.Reg. at 43,906-07.
Petitioners contest these negative determinations.
A. ITC's Determination
The Commission found by a vote of 5-1 that imports from Brazil, Germany, France, Korea, and Japan did not cause or threaten material injury. All Commissioners voted in the negative regarding imports from Belgium, and by a vote of 4-2 the majority found imports from Canada and the Netherlands did not cause or threaten material injury. Dissenting views as to the threat finding were written by Commissioners Newquist and Rohr.
The Commission reasoned that a negative determination was appropriate for all countries subject to investigation because there was a lack of causal nexus between the subject imports and the condition of the industry. Final Det. at 52. The Commission found the domestic like product to consist of hot-rolled carbon steel flat products, including plate in coils and hot-rolled floor plate in coils. Id. at 14. During the period of investigation, the domestic industry's market share, by quantity, declined by one percent, and remained in excess of 93 percent. Id. at 52; Pub. Staff Rpt. at I-144 tbl. 103. The Commission also found market penetration of the subject imports to be low. Final Det. at 46-47. The Commission was unable to find convincing evidence that there was a relation between declines in domestic industry performance and minor increases in the volume of imports. Id. at 52-53.
The Commission noted that the large percentage of domestic industry production was captively consumed and concluded that the industry was affected only minimally by the subject imports. Id. at 21, 53. The Commission also determined that there was a lack of price effects by reason of the subject imports, partly because the product market was not highly price sensitive, nor were imports greatly substitutable with domestic products. Id. at 47-48. Although prices for domestic and imported products decreased somewhat during the period, import prices fluctuated and fell less than did domestic prices, imports generally oversold domestic products, and no lost sales or revenue allegations could be confirmed. Id. at 48-49.
In addition, the majority concluded that most Korean imports were shipped from defendant-intervenor Pohang Iron & Steel Company ("POSCO") to USS-POSCO Industries ("UPI"), an affiliated domestic producer. Thus, the remaining volume of imports sold on the merchant market was very small. Id. at 54-55. Some of these merchant market Korean products fell into niche product categories, thus substitutability was somewhat limited. Id. at 55. The majority found a lack of causal nexus between Korean imports as a whole and any material injury to the domestic industry. Id.
The Commission also determined that negligible imports from the non-cumulated subject countries were insignificant in absolute volume, and as a share of domestic consumption. Id. at 56. In part on the basis of data demonstrating significant overselling, the Commission found these imports had no significant effect on domestic prices. Id. at 56-57.
With regard to threat of material injury, the Commission exercised its discretion not to cumulate, making an individual negative finding for each subject country. Id. at 59. The majority determined that for Canada, an increase in market penetration over the period was offset by a significant increase in home market and third country shipments. Id. at 62. Although production capacity had increased, the majority noted that projections indicated a decline in 1993. Id. The majority stated that although there was the possibility of product shifting from corrosion-resistant products to hot-rolled products, the high cost of investment in a corrosion-resistant production line was a large...
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