US trade panel urged to stop China's job "banditry"

* Panel mulls duties in biggest case yet against China

* Ohio, Pennsylvania politicians plead for action

* Market demand caused import surge, lawyer says

By Doug Palmer

WASHINGTON, Dec 1 (Reuters) - U.S. elected officials accused China on Tuesday of stealing American jobs and urged a government trade panel to fight back by approving steep duties on Chinese-made steel pipe used in oil and gas production.

"This country has been a patsy for too long and we are the getting the you-know-what kicked out of us," Pennsylvania Governor Ed Rendell told the U.S. International Trade Commission at a hearing in the final phase of the biggest U.S. trade remedy case to date against China.

It follows President Barack Obama's decision in September to slap import duties on about $1.8 billion of Chinese-made tires, fueling criticism from Beijing of growing U.S. protectionism.

After imports of "oil country tubular goods" (OCTG) from China more than tripled between 2006 and 2008 to $2.63 billion, the United Steelworkers union, Maverick Tube Corp, United States Steel Corp (X.N) and other domestic producers asked the Commerce Department for duties on the steel pipe.

Last month, the Commerce Department issued a final determination that Chinese producers received "countervailable" government subsidies ranging from roughly 10 to 16 percent.

The department also has issued a preliminary ruling that the pipe is being "dumped" in the United States at prices up to 99 percent below fair market value.

For duties equal to those amounts to stay in force, the ITC has to rule U.S. producers have been materially injured or threatened with material injury by the lower-priced Chinese pipe. A vote in the countervailing duty investigation is expected on Dec. 30 and in the anti-dumping probe in mid-March.

'JOBS...TARGETED'

At the hearing on Tuesday, Representative Betty Sutton of Ohio accused China of subsidizing "millions of tons" of unnecessary OCTG production capacity that caused at least 2,100 U.S. steelworkers to lose their job over the past several years.

"Their jobs were specifically targeted by the Chinese government ... What has happened to these hardworking men and women is not fair," Sutton said.

Youngstown, Ohio Mayor Jay Williams, whose city's unemployment rate is 14 percent, said he feared that OCTG manufacturer V&M Star LP would not follow through on plans to expand its local plant unless the duties are approved.

"Our OCTG consumption in the United States is many times the size of OCTG consumption in China, but China has actively developed this industry so they may export to the United States, steal our jobs and endanger our communities," he said.

"I don't think it would be too extreme to say it's a form of international banditry," Senator Arlen Specter of Pennsylvania added.

James Durling, an attorney representing Chinese producers, said high energy prices that lead to increased U.S. drilling activity caused the huge jump in imports from China, just as the U.S. economic downturn explained much of the collapse in OCTG prices and demand over the past year.

"The domestic industry simply could not meet strong demand in 2008. That is why prices surged to record levels and that is why customers were scrambling to find supplies wherever they could," Durling said.

U.S. OCTG producers earned $3.4 billion in surplus operating profits during the recent boom period, enough to allow the industry to "fund two years of fixed costs and full employment" after demand slackened, Durling said.

"No worker had to lose his or her job ... It is simply inconceivable to argue that such an industry with such surplus profits is being injured or threatened with injury," he said.

(Editing by Cynthia Osterman) ((doug.palmer@thomsonreuters.com; +1 202 898 8341; Reuters Messaging: doug.palmer.thomsonreuters.com@reuters.net))