U.S. panel approves final duties on China drill pipe

WASHINGTON Mon Feb 7, 2011 3:32pm EST

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WASHINGTON (Reuters) - A U.S. trade panel Monday approved combined final duties ranging up to nearly 450 percent on steel drill pipe from China used in oil production.

The U.S. International Trade Commission on a 3-3 vote said there was sufficient evidence U.S. companies are threatened with harm by unfairly low-priced imports from China.

A tie vote is enough under U.S. trade law to win import relief, even if it is based only on a threat of injury and not actual injury that has already occurred.

The decision is a victory for the United Steelworkers union and four U.S. producers that joined together to bring the case.

They were VAM Drilling USA, Texas Steel Conversions Inc and

Rotary Drilling Tools of Texas and TMK IPSCO of Illinois.

The United States imported $119.2 million of the drill pipe from China in 2009, down from $193.8 million in 2008.

The vote clears the way for the Commerce Department to issue final antidumping and countervailing duties on the imports for at least five years.

The department last month approved antidumping duty rates of 69 percent to nearly 430 percent on a swath of Chinese companies to offset unfairly low pricing.

U.S. drill pipe importers criticized the vote, which they said would increase the cost of U.S. oil production.

"As a direct result of the vote, drilling companies will have to spend millions of dollars more on drill pipe and less on hiring workers to do the drilling," David Lesco, general manager of Downhole Pipe & Equipment of Sugarland, Texas, said in a statement.

Two Chinese companies, Baoshan Iron & Steel and Shanxi Yida Special Steel Import and Export, escaped being hit with any antidumping duties in that investigation.

But those companies risk future duties after annual administrative reviews in which Commerce looks at the actual price of imports and adjusts duty rates, said Lewis Leibowitz, a lawyer who represented drill pipe importers in the case.

As a result of Monday's vote, all Chinese drill pipe producers and exporters will face an 18.18 percent countervailing duty to offset subsidies they receive from the Chinese government.

(Editing by Doina Chiacu)

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