American steel producers and the USW wish to highlight the inappropriateness of efforts by Chinese officials to politically influence legal proceedings in the United States, as referenced in recent press accounts. Fair trade proceedings, such as those reflected in ongoing antidumping and anti-subsidy actions against Chinese producers, are legal in nature and should be decided based on the facts and statutory standards – not based on political influence.
Over the past several weeks, the Ministry of Commerce of the People’s Republic of China (MOC) has attacked the use of our antidumping (AD) and countervailing duty (CVD) laws in a case involving dumped and subsidized imports of oil country tubular goods (OCTG) from China. Chinese officials have argued that the participants in the recent G20 summit committed themselves to fighting “protectionism” – and have suggested that prosecution of WTO-sanctioned trade proceedings is somehow inappropriate. Nothing could be further from the truth.
Antidumping and anti-subsidy disciplines have been an accepted part of the world trading system since the establishment of the GATT (the predecessor of the WTO) in 1948, as a necessary mechanism to ensure that everyone is playing by the same set of rules. They are not political or policy actions, but are legal in nature and wholly consistent with our international obligations.
While the Chinese government is attacking the legitimate use of U.S. laws against dumped and subsidized imports, it is also trying to obscure the fact that China is today the world’s most egregious violator of fair trade disciplines. For the sake of fair trade, open markets and support for the global trading system, steel producers on three continents recently called upon the government of China to end these practices now. Strict enforcement of accepted rules against subsidies and unfair dumping is an essential part of that effort.
It is important that the public understand that AD/CVD actions are market-correcting, not market-distorting. As such, these actions are the opposite of “protectionist.” These laws exist in order to counter injurious foreign trade and market-distorting practices. If anything is being "protected" when remedies are applied under these U.S. laws, it is the market and the rules-based free trade system.
The public should also know that China itself routinely utilizes these WTO-sanctioned remedies. In fact, it uses antidumping law much more often than does the United States. In the last six months of 2008, China initiated 16 AD investigations, while the United States initiated three. According to a recent WTO study, China was the world’s second leading user of these laws in the last half of 2008, as well as the country most subject to unfair trade allegations by other global trading partners. This only underscores the fact that the recent inappropriate efforts of the Chinese government to paint such actions by the United States as improper or “protectionist” are both misleading and wrong. The Chinese government’s attempt to use political influence and economic threats against fair trade rules – and in defense of its own proven market-distorting practices – should be flatly rejected.