Trying to eliminate US import tariff on urea

chemical industry

As Kommersant has learned, EuroChem has begun negotiations with the US Department of Commerce on revising customs duties on the import of Russian urea. If they are successful, domestic producers will be able to provide 10% of the American market for these raw materials, earning about $250 million a year from supplies. Currently, Russian urea is not supplied to the United States at all, and protective duties were introduced due to the actions of Soviet foreign trade organizations.

Urea (urea) is used in the production of resins, adhesives, plastics, chemical fibers, and also as a nitrogen fertilizer and additive for livestock feed. Its largest importer is the USA (5.2 million tons in 2003). An anti-dumping duty on urea of 68.26% was introduced by the United States in 1987 for products from the USSR and Romania. In 1991, the US Department of Commerce (DOC), instead of the general norm for the USSR, adopted 15 resolutions - for each former republic. According to American rules, they are subject to revision every five years.

The issue of canceling the duty on Russian urea in the United States was first raised in March 1999. Then members of the American Foreign Trade Commission (ITC) came to the conclusion that the Russian side's responses to the first series of requests were insufficient, and voted to conduct an investigation using an expedited procedure, as a result of which the duties were maintained. The issue of duties was raised again this year on October 1.

Russian companies actively joined the fight for the abolition of the duty - the initiator was the mineral and chemical company Eurochem (NAK Azot and Nevinnomyssk Azot, part of the MCC, produce 25% of domestic urea; in total, about 4.6 million were produced in Russia in 2003 t of urea). Recently, MHC sent notifications of its readiness to participate in the investigation to the DOC, and by the end of the week it plans to submit applications to the ITC. MHC has already been supported by Berezniki and Kemerovo Azots and Kuibyshevazot.

The revision of duties takes place in two stages. The DOC determines whether dumping will occur if the duty is waived. ITC concludes whether its repeal would harm American industry. The actions of the Russians are coordinated by the law firm White & Case (W&C) and EuroChem lawyers. Moreover, MHC emphasizes that confidential information from enterprises that supported MHC can be sent directly to W&C, bypassing Eurochem.

In negotiations with DOC, the Russian position will be based on the fact that in 1987 the American department took as a basis supplies from the USSR - a country with a planned economy, a monopoly on foreign trade and state price control, and current Russian companies did not take part in the investigation. In addition, in 1987, when calculating the duty, the investigation was based on the non-market nature of the USSR economy, and after the US recognized Russia as a country with a market economy, this approach is incorrect. The likelihood of winning the case in the ITC will depend on the situation in urea production in the United States, the forecast for its imports, the position of Russian companies and, partly, other countries in respect of which the duty applies.

Preliminary results of the DOC investigation are due in January 2005, with final results in August. The ITC promises to issue a verdict by mid-September 2005 and complete its investigation in December. The MHC considers it quite possible for the ITC to change its position on duties on urea - many members of the commission who voted in 1999 resigned from its membership. Moreover, in 1999, Russia did not actively defend its interests in the ITC.

According to calculations by EuroChem specialists, if the duty is lifted, Russia will be able to supply at least 1 million tons of urea per year to the United States (this is about 20% of imports and 10% of urea consumption in the United States) worth about $250 million.

RENATA Kommersant-YAMBAEVA

Eurochem fights against the Soviet past