Consultations are the first step in the WTO dispute settlement process, and parties are encouraged to agree to a solution at this stage. Under WTO rules, if the matter is not resolved through consultations within 60 days, the United States may request the establishment of a WTO dispute settlement panel. The European Union and Japan also requested WTO consultations with China on this matter also.
Ambassador Kirk said, "America's workers and manufacturers are being hurt in both established and budding industrial sectors by these policies. China continues to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace. The launch of this case against China today, along with the President's creation of the Interagency Trade Enforcement Center, reflects the Obama Administration's commitment to make all of our trading partners play by the rules. We will continue fighting for a level playing field for American workers and manufacturers in order to grow our economy, and ensure open markets for products made in America."
The United States recently won a WTO challenge against China's export restraints on nine other industrial inputs. China's export restraint measures on rare earths, tungsten, and molybdenum appear to be part of the same troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers.
China imposes several different types of unfair export restraints on the materials at issue in the consultations request, including export duties, export quotas, export pricing requirements as well as related export procedures and requirements. Because China is a top global producer for these key inputs, its harmful policies artificially increase prices for the inputs outside of China while lowering prices in China. This price dynamic creates significant advantages for China's producers when competing against U.S. producers both in China's market and in other markets around the world. The improper export restraints also contribute to creating substantial pressure on U.S. and other non-Chinese downstream producers to move their operations, jobs, and technologies to China.
Access a release from the U.S. Trade Representative with additional information and background (click here). Access a release from Sen. Stabenow (click here). Access a release from Sen. Murkowski and link to related information (click here). Access legislative details for S.1113 (click here). [#Land]
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