Transcript The WTO Case Against China’s Export Restraints on Rare

The WTO Case Against China’s Export
Restraints on Rare Earths, Tungsten, and
Molybdenum
A Perspective from the U.S.
By
Terence P. Stewart
Law Offices of Stewart and Stewart
[email protected]
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
“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,” said
Ambassador Kirk.
USTR Press Release, March 13, 2012
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
USTR Fact Sheet, March 13, 2012
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
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 today’s 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.
USTR Press Release, March 13, 2012
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
Annual Average Price in $/kg
$120
lanthanum oxide
$100
cerium carbonate
tungsten powders
$80
$60
$40
$20
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
• This is the second case on the same or similar
policies as applied to different products.
• First case, Appellate Body Report on January
31, 2012 finding export duties and export
quotas violated WTO obligations
• Dispute Settlement Body adopted AB Report
on February 22, 2012 with recommendations
to China to bring its measures into conformity
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
• March 13, 2012 Request for Consultations
from the U.S. (with similar requests from the
EU and Japan):
– Export duties
– Quantitative restrictions such as quotas
– other restrictions which discriminate against
foreign invested entities, including:
• Fees and formalities
• Restrictions on the right to export
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
• March 13, 2012 Request for Consultations
from the U.S. (with similar requests from the
EU and Japan)(cont.):
– Other restrictions such as licensing requirements
– Minimum export price system, approval of export
contracts and export prices
– Administration of various export restraints is not
uniform, impartial, reasonable or transparent
– Also administration through measures that are not
published
The WTO Case Against China’s Export Restraints on Rare Earths,
Tungsten, and Molybdenum – A Perspective from the U.S.
•
Unless China modifies its basic approach to export restraints, there will be more
cases in the future. For example, the following products were identified as of
concern in a report we released in late January on auto parts in addition to those
subject to the new case:
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Antimony
Chromium
Cobalt
Copper
Germanium
Graphite
Indium
Nickel
Niobium
Silver
Talc
Tin
Titanium
Vanadium