[EDITORIALS]Steeling for more trouble

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[EDITORIALS]Steeling for more trouble

The local steel industry, Korea's major exporter, has been hit by a series of bad news, as the European Union and China have plunged into a trade dispute over steel products, following the United States' imposition of tariffs on steel from Europe. The EU's retaliatory sanctions on a list of U.S. goods and China's decision to launch an anti-dumping investigation into cold-rolled steel imports from Korea herald the beginning of a firestorm, which has been expected since Washington touched off a trade row over steel. We are worried about possible chain reactions around the world as well as the impact on the local steel industry. The EU has shown its willingness to retaliate against the U.S. move by targeting new tariffs on some U.S. goods that bear political significance to the Bush administration. But Europe minimized bilateral conflicts by excluding the existing export volume from the planned high tariffs.

But the decision by China, the biggest market for Korea's steel exports, to begin an anti-dumping probe of Korean cold-rolled steel products could do serious damage to Korea's exports of more than $300 million a year. If the investigation expands to other products, the damage would be enormous. There are ominous signs among Asian countries, as stiff price competition is forecast due to the export barriers in the United States and Europe. International steel prices, which have shown signs of a rebound recently, will likely turn lower.

What concerns us is the insincere attitude shown by the Korean government and steelmakers toward the trade disputes. Japan, a major exporter of cold-rolled steel products to China, escaped Beijing's anti-dumping scrutiny by reducing its shipment to China by 300,000 tons last year, when Beijing conducted an investigation into suspected dumping cases. By contrast, Korea has become the major target of the planned probe, as it increased its steel exports to China by more than 20 percent.

The Korean government should demand that China, as a member of the World Trade Organization, carry out a fair investigation. Seoul should also show its willingness to retaliate against those that took protective measures on a case-by-case basis, rather than talking only about taking them to the trade watchdog.
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