[Code of Federal Regulations]
[Title 3, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 3CFRMar3]

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:

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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.

          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.

GEORGE W. BUSH

THE WHITE HOUSE,

Washington, March 3, 2004.