Japan Says Section 232 Petition an End Around on ITC Finding on Titanium Sponge

A U.S. producer of titanium sponge is using the Section 232 petition process as a way around a previous International Trade Commission finding, Japan said in comments in response to the petition. The Section 232 petition, filed by TIMET, asked the Commerce Department to get Japan to agree to a reference price 30 percent or more above current prices (see 1904100032). "Section 232 of Trade Expansion Act should not be used to justify circumvention of anti-dumping rules or disguised protectionism policy," Japan said. Nearly all of the filings have so far have opposed TIMET's request.

The ITC considered a TIMET petition for antidumping and countervailing duties only 18 months ago, Japan said. The ITC found that imposing AD/CV duties "on titanium sponge imports was devoid of basis under domestic law, because there was not even a reasonable indication of material injury or threat to the domestic industry," Japan said. The ITC's decision was based on information provided by U.S. industry, it said. "Measures against titanium sponge imports such as broad trade restriction measures in the name of security including introduction of tariffs exceeding WTO bound tariff rate, quotas or price commitments or forcing exporters to introduce voluntary export restraints raise serious questions about the compliance with the WTO agreements," the country said.

The Aerospace Industries Association also cited the ITC decision in comments opposing new Section 232 measures. "Those conditions have not changed since that ruling," the AIA said. "The U.S. Government should not create a false market to benefit a single company and in turn, risk a major disruption to the most stable global market for titanium sponge in the last 40 years." Such remedies would also create new risk of "trade retaliation and damage to security cooperation partnerships," it said. The "direct and indirect impacts from trade retaliation could be devastating."

The request is unrelated to national security and is instead only meant to improve TIMET's market share, the government of Kazakhstan said in comments. "The conclusion should be made is that the main purpose of TIMET’s petition has no relation to the US national security concerns, but presumably to increase the competitiveness of its products at the expense of the interests of other American titanium products manufacturers," it said. "The Government of the Republic of Kazakhstan is concerned that this is the second recent investigation by the Department of Commerce on the matter of national security relating to imports of Kazakhstani products."

One supporter of TIMET's request was Rep. Susie Lee, D-Nev., who represents the district where TIMET is located. "While there are other US companies producing titanium products, TIMET is the only US company that is currently capable of producing titanium sponge," she said. "The other US producers are 100% reliant on imported titanium sponge. That's why the Department of Defense recognized the importance of titanium sponge to national security, [and] concluded that TIMET's titanium sponge plant is a potential single point of failure." Lee also requested an "update on this investigation, and when TIMET can expect an adjudication of its petition."

Boeing requested a two-week extension to the comment period on April 12, which the Bureau of Industry and Security apparently hasn't addressed. The company noted that the investigation began on March 4 and the petition wasn't made publicly available by TIMET until April 8, allowing only 14 days before the initial comments were due on April 22. "The petition and its exhibits are over 400 pages long and contain a significant amount of detailed, technical information," the company said. Rebuttal comments are due by May 22.