Steel Institute Testifies to China's Failed WTO Compliance

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For Immediate Release
October 1, 2014

Washington, D.C. – Upon joining the World Trade Organization (WTO) nearly 13 years ago, China pledged to liberalize its economy and bring its trading practices more in line with international norms but evidence shows that China continues to operate as a state capitalist regime, said Kevin Dempsey, senior vice president of public policy for the American Iron and Steel Institute (AISI), in testimony today to the interagency Trade Policy Staff Committee (TPSC), headed by the U.S. Trade Representative (USTR). Outlining the detriment to the U.S. steel industry and manufacturing sector caused by unfair trade practices, Dempsey urged the U.S. government to adopt a more aggressive strategy in addressing China’s trade-distorting practices.

“The current U.S.-China trading relationship is taking a tremendous toll on U.S. manufacturers – millions of jobs have been lost, thousands of U.S. factories have been shuttered and the American steel industry has been severely disrupted,” testified Dempsey. “The U.S. needs to take much bolder and imaginative steps to address this chronic problem.

“The fact that China has not fully complied with its WTO obligations underscores the importance of effective enforcement of U.S. trade remedy laws. The U.S. should continue to treat China as a non-market economy for purposes of the U.S. antidumping laws, ensure that Chinese companies are not circumventing or evading U.S. antidumping and countervailing duties and take strong actions to address attempts by China to gain unfair advantage in trade remedy proceedings by hacking the computer systems of domestic producers in the U.S.,” Dempsey continued.

Click here for full testimony which highlights the overall comments submitted to the TPSC on September 17, 2014.

Dempsey’s testimony focused on a number of China’s trade violations including: 

  • Massive government subsidies to the Chinese steel industry, while the government manipulates its value-added tax system to manage and promote exports of its steel products. 
  • Heavy control over state owned enterprises (SOEs), despite China’s pledge – as part of its WTO accession -- that it would not “influence” commercial decisions.
  • Numerous measures to inappropriately aid its steel producers in securing access to raw materials and manipulate raw material prices that give Chinese producers an unfair advantage over U.S. producers.
  • Keeping the value of its currency at artificially-low levels that gives Chinese manufacturers an unfair advantage in the U.S. and third country markets.
  • Effective enforcement of intellectual property rights has still not been achieved in China and infringements remain a serious concern.  

Dempsey concluded, “The U.S. steel industry can compete with any industry in the world, but we cannot compete with governments. China has used massive subsidies and other trade-distorting measures that are in violation of its WTO obligations to provide an unfair advantage to its steel industry. The U.S. government must fundamentally alter its approach to encourage China to end its trade-distorting practices and comply with all of its WTO obligations.”

Contact: Lisa Harrison
202.452.7115 / lharrison@steel.org

Click here for a PDF version of this release.

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 21 member companies, including integrated and electric furnace steelmakers, and approximately 125 associate members who are suppliers to or customers of the steel industry. AISI's member companies represent over three quarters of both U.S. and North American steel capacity. For more news about steel and its applications, view AISI's website at www.steel.org.