WORLD TRADE
ORGANIZATIONG/SG/N/8/USA/8/Suppl.2
15 January 2002
(02-0183)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT
THEREOF CAUSED BY INCREASED IMPORTS
UNITED STATES
Supplement
The following notification, dated 11 January 2002, has been received from the Permanent
Mission of the United States.
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Pursuant to Article 12.1(b) of the WTO Agreement on Safeguards, the United States submits
a supplemental notification regarding the determinations of the United States International Trade
Commission ("ITC") with respect to serious injury, or threat thereof, to the domestic industries
producing certain steel products.
SUPPLEMENTAL NOTIFICATION UNDER ARTICLE 12.1(B)
OF THE AGREEMENT ON SAFEGUARDS
The United States provides the following supplemental information relating to its notification
of 1 November 2001 (G/SG/ N/8/USA/8), as supplemented on 28 December 2001
(G/SG/N/8/USA/8/Suppl.1), regarding the determinations of the ITC in respect of serious injury, or
threat thereof, to the domestic industries caused by increased imports of certain steel products.
5. Provide the proposed date of introduction of the measure.
On 3 January 2002, the United States Trade Representative requested that the ITC provide
additional information in several areas.  A copy of the request is attached to this notification.  The
additional information was requested to assist the interagency group that is considering what actions,if any, to recommend that the President take.
Under US law, the ITC has 30 days to furnish a supplemental report in response to a request
for additional information.  The ITC is, therefore, expected to furnish a supplemental report on or
about Monday, 4 February 2002.  US law further provides that the President has 30 days from thereceipt of a supplemental report to determine what safeguard action, if any, he will take.  Therefore, if
the President receives the ITC supplemental report on 4 February 2002, he must make his decision no
later than 6 March 2002.
The United States will provide the Committee with the ITC’s supplemental report, excluding
confidential information.
* * *G/SG/N/8/USA/8/Suppl.2
Page 2
3 January 2002
The Honorable Stephen Koplan
Chairman
United States International
Trade Commission
500 E Street, S.W.
Washington, DC 20436
Dear Chairman Koplan,
Thank you for transmitting the US International Trade Commission (Commission) report to
the President under section 202(f) of the Trade Act of 1974 (Trade Act), 22 U.S.C. § 2252(f),
concerning its investigation of steel (ITC Report) on 19 December 2001.  Thank you as well forsubsequently issuing a public version of the ITC Report:  Steel, Inv. No. TA-201-73, USITC Pub.
3479 (December 2001).
As you are aware, this is the largest and most complex Section 201 proceeding ever
undertaken, involving 33 subcategories of steel products.  You and the ITC staff have undertakenmuch work in a relatively brief time.  Of course, a proceeding of this magnitude requires the most
careful consideration.  As I know you and your colleagues will appreciate, it is crucial that the
Administration have at its disposal all of the information necessary to make a decision under section
203 of the Trade Act that fully takes account of domestic economic considerations and U.S.
international obligations.
Therefore, under authority delegated by the President, I respectfully request that the
Commission provide the following additional informa tion pursuant to section 203(a)(5) of the Trade
Act:
1. Unforeseen developments
For each affirmative determination under section 202(b)(1) of the Trade Act (affirmative
determination) or determination under such section that the President, pursuant to section 330(d)(1) of
the Tariff Act of 1930, 19 U.S.C. § 1330(d)(1), may consider to be an affirmative determination
(equally divided determination), could you please identify any unforeseen developments that led to
the relevant steel products being imported into the United States in such increased quantities as to be asubstantial cause of serious injury, or threat thereof?
2. Economic analysis of remedy options
(a) In the ITC's Section 201 investigation, several parties provided econometric models
that purported to measure the relationship between imports and the condition of the
domestic industry.  The Commission indicated on page 61 of the ITC Report that
these models had "serious limitations."  Could you please identify such limitations,
including limitations with respect to assumptions or data used in such models
regarding supply, demand, pricing or other economic factors?
(b) Could you please (1) provide any available documentation on the economic models
traditionally employed by the Commission; and (2) identify the modifications madeG/SG/N/8/USA/8/Suppl.2
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to the models to take into account the market linkages among the different types of
imported certain carbon flat-rolled steel?
(c) Could you please (1) identify and provide the economic models used to evaluate the
effects of the remedy recommendations or proposed remedies of the Commission or
of individual Commissioners; and (2) identify the assumptions and data regardingsupply, demand, pricing and other economic factors used in such models?
(d) The explanation of the Commission’s remedy recommendations refers to economic
analyses that indicate how a particular remedy will affect a domestic industry’s sales
revenues and sales volumes and what other effects it will have, including costs to
consumers.  (e.g., ITC Report at 380, 409-410, 418.)  For each remedy recommended
by the Commission or by any Commissioner,  could you please provide the results of
these analyses, including information on how the recommended remedy will affectindustry sales revenues, sales volumes, and prices, as well as the costs to consumers?
(e) For each remedy recommendation, could you please provide any additional
information compiled or produced by the Commission regarding the effects of a
higher or lower tariff, tariff-rate quota, or quantitative restriction, as the case may be?
(f) For each remedy proposed by an interested party, could you please provide any
information compiled or produced by the Commission on how it would affect the
domestic industry’s sales revenues and sales volumes, costs to consumers, and other
effects it would have, including any effects referenced on pages 380, 409-410, and
418 of the ITC Report?
(g) Could you please provide a copy of any memoranda cited in the ITC Report that you
are not otherwise providing in response to items (a) through (f)?
3. Potential exclusions from safeguard actions under Section 201
(a) Section 312(a) of the NAFTA Implementation Act requires the President to make a
determination as to whether imports from Canada or Mexico account for a substantialshare of total imports or contribute importantly to the serious injury, or threat thereof,
found by the ITC.  In the event that the President decides that conditions require the
exclusion of both Canada and Mexico from the following determinations or equally
divided determinations, could you please report on whether increased imports of the
following products from all sources other than Canada and Mexico are a substantial
cause of serious injury or threat of serious injury, as those terms are interpreted under
sections 201-204 of the Trade Act, to the domestic industries, as such industries weredefined by the individual Commissioners:
(i) Certain carbon flat-rolled steel (carbon and alloy slabs, plate, hot-rolled steel,
cold-rolled steel, and coated steel);
(ii) Carbon and alloy hot bar;
(iii) Carbon and alloy cold bar;
(iv) Carbon and alloy fittings;
(v) Stainless steel bar;G/SG/N/8/USA/8/Suppl.2
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(vi) Stainless steel fittings; and
(vii) Welded tubular products other than OCTG.
(b) With regard to items (iv) and (vi) of paragraph (b), could you please indicate whether
the conclusion would be different if (i) only Mexico were excluded and (ii) only
Canada were excluded?
(c) Section 403 of the Trade and Tariff Act of 1984, 19 U.S.C. § 2112, note, and section
221 of the United States-Jordan Free Trade Area Implementation Act authorize the
President to exclude imports from Israel and Jordan, respectively, from any safeguard
action under Section 201.  For each affirmative determination, equally divided
determination, and response to items (a) and (b), could you please indicate whether
exclusion of imports from Israel and Jordan would change the conclusions of the
Commission or of individual Commissioners?
(d) With regard to Commissioner Bragg’s affirmative determinations on carbon and alloy
flat products, stainless and tool steel flat and long products, and stainless steel wire
products, in each instance where she found that exclusion of Mexico or Canada from
the analysis does not change the recommended findings, could you please indicate the
basis for that conclusion?
As you know, given the difficult circumstances facing the US steel industry, it is important to
receive this information as expeditiously as possible to enable the President to reach a decision on
how to respond to the Commission's recommendations.  We of course greatly appreciate the
extraordinary work already undertaken by the Commission and its staff and, therefore, thank you in
advance for seeking to handle these additional requests with dispatch.  Thank you for your promptattention to this matter.
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