[Federal Register Volume 69, Number 45 (Monday, March 8, 2004)]
[Presidential Documents]
[Pages 10597-10598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5299]


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  Federal Register / Vol. 69, No. 45 / Monday, March 8, 2004 / 
Presidential Documents  

[[Page 10597]]


                Memorandum of March 3, 2004

                
Presidential Determination on Imports of Certain 
                Ductile Iron Waterworks Fittings from the People's 
                Republic of China

                Memorandum for the United States Trade Representative

                Consistent with section 421 of the Trade Act of 1974, 
                as amended (19 U.S.C. 2451), I have determined the 
                action I will take with respect to the affirmative 
                determination of the United States International Trade 
                Commission (USITC Investigation TA-421-4) regarding 
                imports of certain ductile iron waterworks fittings 
                (pipe fittings) from China. After considering all 
                relevant aspects of the investigation, I have 
                determined that providing import relief for the U.S. 
                pipe fittings industry is not in the national economic 
                interest of the United States. In particular, I find 
                that the import relief would have an adverse impact on 
                the United States economy clearly greater than the 
                benefits of such action.

                The facts of this case indicate that imposing the 
                USITC's recommended tariff-rate quota remedy or any 
                other import relief available under section 421 would 
                be ineffective because imports from third countries 
                would likely replace curtailed Chinese imports. The 
                switch to third country imports could occur quickly 
                because the major U.S. importers already import 
                substantial quantities from countries such as India, 
                Brazil, Korea, and Mexico. Because importers' existing 
                inventories of imports will likely cover demand for 
                approximately 6 to 12 months from the imposition of 
                import relief, a switch from China to alternative 
                import sources would not likely lead to significant 
                additional demand for domestically produced pipe 
                fittings, even accounting for a time lag in making that 
                switch. Under these circumstances, import relief would 
                provide no meaningful benefit to domestic producers.

                In addition, import relief would cost U.S. consumers 
                substantially more than the increased income that could 
                be realized by domestic producers. Indeed, the USITC 
                estimated that its recommended remedy would generate a 
                negative net domestic welfare effect of between $2.3 
                million and $3.7 million in the first year alone.

                While not necessary in reaching my determination that 
                imposing import relief would have an adverse impact on 
                the United States economy clearly greater than the 
                benefits, it is also worth noting two additional 
                points:



First, evidence suggests that domestic producers enjoy a strong competitive 
position in the U.S. market, and in fact the largest domestic producer 
recently announced price increases nationwide ranging from 8 to 35 percent. 
The two smaller domestic producers and the major U.S. importers have 
publicly indicated that they would follow these price increases.



Second, in 2002 and 2003, imports of this product have been relatively 
stable in volume terms and have shown a slight decline in value terms.



[[Page 10598]]

                The circumstances of this case make clear that the U.S. 
                national economic interest would not be served by the 
                imposition of import relief under section 421. I remain 
                fully committed to exercising the important authority 
                granted to me under section 421 when the circumstances 
                of a particular case warrant it.

                You are authorized and directed to publish this 
                memorandum in the Federal Register.

                    (Presidential Sig.)B

                THE WHITE HOUSE,

                    Washington, March 3, 2004.

[FR Doc. 04-5299 Filed 3-5-04; 8:45 am]
Billing code 3190-01-P