Thu, Jun 19, 2003 page12

• Fish-and-chips trade war begins

  CATFISH & COMPUTERS In a series of rulings on Tuesday, the US showed its willingness to use stiff tariffs in an attempt to protect domestic industries

  • AP
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  The US ruled that American catfish farmers and computer chip manu-facturers were subjected to unfair foreign competition and ordered stiff tariffs on imports of Vietnam-ese catfish and South Korean computer chips.

  The US Department of Commerce rulings Tuesday upheld, with minor adjustments, preliminary tariff determinations that the agency issued earlier in the year.

  

  Vietnamese feed catfish in a family fishfarm in Chau Doc on Nov. 1, 2002 in the southern Mekong Delta, Vietnam. Vietnamese catfish farmers said yesterday the US will destroy thousands of jobs by imposing sanctions on frozen fillets shipped to America as well as hamper future trade relations between the two former enemies. The US Department of Commerce imposed sanctions on Vietnamese exporters Tuesday after ruling that frozen catfish fillets had been dumped on the American market at unfairly low prices.

  PHOTO: AP

  In the catfish case, the Commerce Department determined that Vietnam had dumped catfish on the American market at unfairly low prices. It said that catfish imports from Vietnam would be subject to anti-dumping tariffs ranging from 36.84 percent to 63.88 percent.

  In the computer chip case, the department ruled that the government of South Korea unfairly subsidized two big South Korean manufacturers and ordered tariffs as high as 44.71 percent.

  In Seoul, the South Korean government announced yesterday that it will file a formal appeal of the US ruling to the WTO.

  "We will work hard to prove that Hynix's exports did not cause material injury to the industry," the South Korean government said in a statement.

  South Korea plans to hold an economic ministers' meeting today to determine when it will formally take its dispute to the Geneva-based global trade body, said Kim Jong-kap, a vice minister of commerce.

  Both decisions represented major victories for US firms, which had complained that they were losing US sales because of unfair competition.

  The Catfish Farmers of America, representing catfish farmers and processors in various Southern states, complained that Vietnam had captured 20 percent of the US$590 million US frozen catfish fillet market by selling at prices that were below the cost of production.

  Vietnamese companies had argued that they could sell catfish in the US at lower prices because labor and feed costs were much lower in Vietnam.

  Both the catfish ruling and the computer chip decision will not become final until the US International Trade Commission rules on July 31 on whether American companies are being significantly harmed by the foreign competition. The commission has already issued preliminary determinations of injury in both cases.

  The Commerce Department ruling in the catfish case kept the high tariff at 63.88 percent on Vietnamese companies that failed to supply information on their costs and imposed a lower tariff of 44.66 percent on seven Vietnamese companies that did supply information on their costs of production. Four more large Vietnamese seafood companies were required to supply information; their tariffs will range from 36.84 percent to 52.90 percent.

  In the computer chip case, the Commerce Department imposed a 44.71 percent tariff on dynamic random access memory semiconductors, or DRAMS, made by Hynix Semiconductor Inc.

  The department ruled that another South Korean-chip maker, Samsung Electronics Co, had received a much smaller government subsidy of 0.04 percent. Under US law, any finding of a subsidy of less than 1 percent means that no penalty tariffs will be levied. Thus computer chip imports from Samsung will not face tariffs.

  An attorney for Hynix said that decision will make it harder for the domestic industry to prove it has been damaged by the South Korean imports because Samsung chips represented a far bigger share of the US market than Hynix.

  "We are very confident that once the International Trade Commission looks at all of the facts, they will agree that imports by Hynix have not caused any injury to the domestic industry," said James Durling, a Washington attorney representing Hynix.
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