AISI calls for decisive action against Chinese WTO non compliance

Thursday, 24 Sep 2009

American Iron & Steel Institute, on behalf of its US member companies, submitted comments to the Office of the United States Trade Representative's Trade Policy Staff Committee documenting China's non compliance with the commitments it made upon its accession to the World Trade Organization and calling for decisive action.

Of main concern, AISI points out that China's non compliance with its WTO obligations remains a severe and growing problem for American steel producers and other US manufacturers.

AISI's comment reads that "In each submission to the TPSC - 2004-2008, AISI has documented how China has used subsidies and other forms of government support to build an enormous steel industry in violation of market principles and China’s WTO commitments."

AISI goes on to point out that:
1. China's government directed steel industry continues to grow
2. Chinese steel exports continue to injure the US steel industry
3. Chinese steel production practices cause environmental damage
4. Decisive action against trade distorting Chinese steel policies should be taken

In addition, AISI notes that its submission does not attempt to identify and discuss every outstanding issue with respect to China’s WTO compliance; however, there are several issues of particular importance to U.S. steel producers. These issues include: subsides, state owned enterprises, government policies distorting the market for raw materials, currency manipulation, China’s continued treatment as a non market economy, enforcement of the China specific safeguard provision (Section 421), product safety issues and intellectual property rights.

The comments highlight the US Administration’s need to address the fact that today, China is on pace to produce over 500 million tonnes of crude steel and has captured 48.5% of global market share. These facts show that the United States’ approach has not been effective in bringing China into compliance. Rather, China is continuing to use trade-distorting measures to build a massive steel industry that is injuring the U.S. steel industry, the U.S. economy, and the environment.