USTR Report Gives Focus to Concerns Repeatedly Raised by AISI on China's Significant Non-Compliance Issues, 10 Years After Its Accession to WTO

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Washington, D.C. -- The U.S. Trade Representative’s (USTR) Report to Congress on China’s WTO Compliance, released this week, catalogues continued and egregious non-compliance by China with trade obligations it agreed to upon its accession to the World Trade Organization (WTO).  These violations are not new and the market distortions caused by these practices have been repeatedly raised by the American Iron and Steel Institute (AISI), according to Thomas J. Gibson, AISI president and CEO.  In fact, according to USTR’s report, the degree of government control and intervention in markets and trade is growing worse, not better.   China’s failure to uphold its WTO commitments continues to harm U.S. manufacturers, Gibson said, which should compel the Administration to move forward with an effective plan of action to achieve significant and long-overdue trade reforms by China.  

“We are pleased that the Administration has given focus to the same significant protectionist policies by China that the steel industry has repeatedly highlighted as creating harmful trade distortions, and which remain unresolved,” Gibson said.   “These include massive government subsidies to, and continued control of, China’s state-owned enterprises (SOEs); China’s restrictive measures to secure access to raw materials; undervaluation of its currency; and the failure to protect intellectual property rights.” 

“Since China joined the WTO, 2.8 million U.S. jobs have been lost or displaced, including 1.9 million in manufacturing. The U.S. trade deficit with China has soared from $83 billion in 2000 to over $273 billion in 2010.  So far this year, it is running about 12% higher than last year,” he said.

“The report rightfully raises concerns about the growing role of "state capitalism" and SOEs in China and the fact that they have moved away in recent years from reform and market-oriented policies,” Gibson said. “In fact, the report points out that in recent years China seems to be embracing state capitalism more strongly, rather than continuing to move toward the economic reform goals that originally drove its pursuit of WTO membership.”

 “In addition, the report draws attention to the harmful continuance of raw material export barriers, the imposition of a trade-distortive system of iron ore import licensing, the use of differential border measures to promote higher value exports, trade-distorting industrial policies for New Energy Vehicles, and the abuse of AD/CVD rules, procedures and processes,” he said.  “By persisting with these practices, China is in direct non-compliance with its WTO commitments.”

Gibson said in addition to ongoing efforts by the Administration to achieve reform of China’s trade-distorting practices through dialogue, the Treasury secretary should declare China a currency manipulator and support congressional legislation to provide a remedy against the injurious effects of Chinese currency manipulation. 

“While it is essential to work with China to reduce its market access barriers and to promote market-oriented trade and economic policies ,” Gibson said, “it will take more than dialogue to resolve existing concerns with China’s trade and industrial policy regime.”  

Along with USTR’s indication that it will invoke the dispute settlement mechanism at the WTO where appropriate, Gibson said it is essential that the Administration continue to rigorously enforce U.S. trade remedy laws when U.S. interests are being harmed by unfairly traded or surging imports from China.

Contact: Nancy Gravatt
202.452.7115
ngravatt@steel.org

Click here for a PDF version of this press release.

Click here to read the USTR report.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.  AISI also plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 25 member companies, including integrated and electric furnace steelmakers, and 120 associate and affiliate members who are suppliers to or customers of the steel industry.  AISI's member companies represent approximately 80 percent of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org.