WASHINGTON The U.S. Commerce Department on Friday said it had reached a draft agreement with the Russian government to revise a 13-year-old deal governing imports of hot-rolled steel.
The pact raises the minimum price at which Russian hot-rolled steel can be sold in the United States.
The department launched the negotiations with Russia after U.S. steel company Nucor Corp. (NUE.N) complained the 1999 agreement was out of date.
Nucor and other interested parties will have a chance to comment on the deal before it is final. Those remarks are due to the Commerce Department by November 23.
After a preliminary review of the 1999 "suspension agreement," the Commerce Department agreed earlier this year that prices for Russian hot-rolled steel were well below the U.S. market.
The reference price for Russian hot-rolled coil imports using the suspension agreement mechanism of $408.32 per tonne for the second quarter compared to the going rate in the domestic market of $763 per tonne in March, the department said in a June 1 notice announcing the preliminary results.
Under the revised formula in the draft deal, the reference price in the fourth quarter would be $601.75 per tonne for one group of Russian hot-rolled steel, $661.92 for a second group and $770.24 for a third.
The draft deal was announced on the same day the House of Representatives approved legislation to establish "permanent normal trade relations" with Russia - a move required by Russia's entry into the World Trade Organization in August.
But Moscow was angered by a provision that threatens sanctions on Russian human rights violators. The Senate must also approve the trade and human rights bill before President Barack Obama can sign it into law.
The 1999 pact is called a suspension agreement because it halted the imposition of U.S. anti-dumping duties on Russian hot-rolled steel.
If the two sides fail to reach a new deal, those anti-dumping duties, which one private trade attorney estimated at 60 to 165 percent, may go into force in December.
The case has pitted Nucor and other U.S. producers against Russian steel companies including JSC Severstal, Magnitogorsk Iron and Steel and Novolipetsk Steel.
A description of the draft deal is posted on the Commerce Department's website: here
(Editing by Mohammad Zargham)