Commerce Wrongly Found Specificity in Widely Used Korean Programs, Exporter Says

The Commerce Department ignored the rulings in past cases when it reached de facto and de jure specificity findings regarding two broadly used Korean government programs, a Korean steel exporter said in a motion for judgment June 17 (POSCO v. U.S., CIT # 24-00006).

Exporter POSCO, which filed its complaint to the Court of International Trade in February (see 2402060061), disputed in its motion both the department’s de facto specificity finding regarding South Korea’s provision of electricity to it for less-than-adequate remuneration and its de jure specificity finding regarding the country’s cap-and-trade emissions program.

POSCO argued that the LTAR electricity, like “public highways and bridges,” is “exactly the type of widely used public program that is not intended to be countervailed.” The benefit is widely used and relies on a standard pricing mechanism, it said.

But even if the program could be considered specific, the only way Commerce was able to find that the steel industry particularly was a disproportionate consumer of LTAR electricity from the South Korean government was by adding its energy usage to that of two other, unrelated industries, the exporter said.

Commerce’s finding “just shows that three randomly chosen industries together consumed a majority of electricity,” it said.

And the department didn’t explain how it determines an industry’s use of a subsidy is disproportionate, it said. The exporter said that the steel industry is energy-intensive, meaning it “would be expected to consume more industrial electricity than other industrial users.”

It also pointed to several other negative specificity rulings reached by Commerce even though the exporter it was investigating then actually used a higher proportion of LTAR electricity from the Korean government. For example, in Bethlehem Steel Corp. v. U.S., an electricity program that saw 51% of its benefits go to a country’s steel industry was not ruled de facto specific, it said.

POSCO also addressed the department’s finding of de jure specificity regarding its use of the Emissions Trading System of Korea. It said this same finding in regard to another South Korean steel exporter, Hyundai Steel, has been struck down multiple times by CIT (see 2405020073) because the law isn't written to expressly limit access to the program to any one industry; any sector or enterprise can qualify for it if they meet the standards, it said.

And, the exporter argued, the Korean government doesn’t actually forgo any revenue due to the K-ETS program, which grants slightly fewer emissions credits per enterprise if said enterprise doesn’t meet certain “international trade intensity” and “production cost” standards. It said the countervailing duty statute implies that eligible companies would otherwise have to buy additional credits from the government. Actually, companies have many ways to acquire more credits, including purchasing them from other private entities, it said.