OCTOBER 2009

China’s WTO non-compliance a problem for U.S. manufacturers

The American Iron and Steel Institute (AISI), on behalf of its United States member companies, submitted comments to the Office of the United States Trade Representative’s Trade Policy Staff Committee (TPSC) documenting China’s non-compliance with the commitments it made upon its accession to the World Trade Organization (WTO) and called for “decisive action.” Of main concern, AISI pointed out that China’s non-compliance with its WTO obligations remains a severe and growing problem for American steel producers and other domestic manufacturers.

“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,” read AISI’s comments.

AISI went on to point out that:

  • China’s massive government-directed steel industry continues to grow;
  • Chinese steel exports continue to injure the American steel industry;
  • Chinese steel production practices cause environmental damage;
  • Decisive action against trade-distorting Chinese steel policies should be taken.

In addition, AISI noted 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 United States 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 United States Administration’s need to address the fact that “today, China is on pace to produce over 500 million MT of crude steel and has captured 48.5 percent 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 American steel industry, the American economy, and the environment.”