The American Iron & Steel Institute has called for China to end its trade distorting policies and practices and to finally comply with all of its World Trade Organizations obligations in oral and written testimony presented at the Office of the US Trade Representative to the interagency Trade Policy Staff Committee.
Mr Barry Solarz SVP of Trade and Economic Policy at AISI stressed in his oral testimony that China's ongoing WTO non compliance continues to have serious, long term consequences for American steel producers, other American manufacturers and our economy as a whole.
This was the AISI's seventh written submission to the USTR on this critical issue.
Mr Solarz noted that "When AISI first submitted testimony on China's non compliance with its WTO commitments in 2004, China was producing 280 million tonnes of crude steel and had a 26% global market share, whereas, today, it is on pace to produce over 600 million tonnes crude steel, with a 47% share of global production. Meanwhile, our trade deficit with China has risen from USD 83 billion in 2000 to USD 227 billion in 2009, an increase of 173%."
Mr Solarz said that the unprecedented growth in China’s steel industry has been made possible not by any genuine comparative advantage, but because of ever increasing Chinese government market interventions, trade distorting practices and repeated violations of WTO obligations. Practices of particular importance to steel, as highlighted in the AISI testimony, include massive government subsidies to, and ongoing bureaucratic control and direction of China's steel producing state owned enterprise's the Chinese government's recent directives that China's national champions should go abroad to further efforts to dominate in world markets; the Chinese government manipulation of its currency, value added tax rebates, raw material markets and trade remedy laws; China's persistent violations of foreign firms' intellectual property rights and China's ongoing violations of agreements intended to prevent unsafe products from entering the marketplace.
The AISI testimony makes clear that, until China complies fully with all of its WTO obligations, the American steel industry and other US manufacturers will continue to be put at a significant disadvantage. Considering that China's ongoing WTO non compliance continues to cause serious, long term harm to the US economy and to claim valuable American manufacturing jobs.
The testimony concludes that "The US must alter its approach so as to send a clear signal to China that it must end its trade distorting policies and practices and comply fully with all of its WTO commitments."