WASHINGTON, Dec 22 (Reuters) - A U.S. trade panel gave final approval on Monday to import duties on circular welded steel pipe from China in a case already being challenged by Beijing at the World Trade Organization.

The U.S. International Trade Commission voted 6-0 in favor of the U.S. Commerce Department imposing countervailing duties ranging up to 40.05 percent to offset Chinese government subsidies for its steel pipe sector.

The case was brought early this year by the U.S. Steel Corp., a steelworkers union and two Texas pipe manufacturers. The product is used to ship oil and natural gas in pipeline and utility distribution systems.

The Commerce Department set final countervailing duties in November of 40.05 percent on Liaoning Northern Steel Pipe Co, 35.63 percent on the Huludao group of companies and and 37.84 percent on all other Chinese steel pipe companies.

The ITC vote on Monday clears the way for the Commerce Department to issue its countervailing duty order.

Meanwhile, the Commerce Department said on Monday it had set final anti-dumping duties of 164.75 percent to 234.51 percent on innersprings from China used to make mattresses.

The ITC will decide by early February whether to give final approval to the duties or not.

The steel pipe case is one of several brought by U.S. industry since March 2007, when the Bush administration angered China by changing how the Commerce Department administers the U.S. countervailing duty program against foreign subsidies.

'PROTECTIONIST APPROACH'

Companies had been free to ask for "anti-dumping" duties against imports from China when they could show the goods were being sold in the United States at less than fair value.

But the Commerce Department's longstanding policy had been that it was too difficult to calculate subsidies in "non-market economies," which discouraged companies from asking for countervailing duties on goods from China.

Last year, the Bush administration said China's economy had evolved to the degree that both anti-dumping and countervailing duties were now appropriate trade remedy tools.

The first case, involving coated paper imports, was immediately challenged by China at the WTO.
But in an unexpected twist, the U.S. ITC later voted that U.S. coated paper producers were not materially harmed or even threatened with material injury by the Chinese imports, so final countervailing duties never took force.

Since then, the U.S. trade panel has approved countervailing duties in other cases against China involving laminated woven sack, rectangular pipe, off-road tires and circular welded steel pipe.
China has challenged those cases at the WTO and the United States, exercising an option routinely used by all WTO members, on Monday asserted its one-time right to block the world trade body from forming a dispute settlement panel.

China will have another opportunity to ask for a panel at the next meeting of the WTO's Dispute Settlement Body on Jan. 20, which is also the day that President-elect Barack Obama will be sworn into office.

"Should such a protectionist approach not be corrected in a timely fashion, there would be escalating harm to various Chinese industries, but also to U.S. consumers," China said in a statement issued in Geneva.

(Additional reporting by Jonathan Lynn in Geneva; Editing by Eric Walsh)

By Doug Palmer

Reuters, Monday December 22 2008

Source: www.guardian.co.uk