29 July 2016
U.S. Files WTO Complaint Against Mainland Chinese Export Duties on Ten Raw Materials
U.S. Trade Representative Mike Froman announced on 13 July that the United States has requested WTO dispute settlement consultations with mainland China concerning export duties on nine different raw materials, namely antimony, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin. The request for consultations has since been expanded to also target export duties on chromium as well as export quotas on antimony, indium, magnesia, talc and tin. Mainland China agreed to eliminate the targeted export duties when it joined the WTO but the United States contends that Beijing has failed to follow through on this commitment. USTR notes that this is the 13th trade enforcement case pursued by the Obama administration against mainland China, more than any other WTO member over the same period.
The United States indicates that the targeted export duties, which range from five to 20 percent ad valorem, provide substantial competitive advantages for mainland Chinese manufacturers by making the raw materials more expensive for U.S. manufacturers that rely on these inputs to produce their downstream goods. These ten raw materials are key inputs into high-value products in vital U.S. industrial sectors, including aerospace, automotive, electronics and chemicals. U.S. authorities contend that the legal instruments through which Beijing imposes and administers these restraints include mainland China’s Foreign Trade Law, Customs Law, Regulation on Import and Export Duties, State Council Customs Tariff Commission Notice on Issuing the 2016 Tariff Adjustment Plan, and General Administration of Customs Notice on the 2016 Tariff Implementation Plan.
A request for consultations is the first step in the WTO dispute settlement process. If talks do not resolve the matter within 60 days, the United States may ask the WTO to establish a dispute settlement panel.