According to the Office of the United States Trade Representative (USTR, an arm of the White House), the Obama Administration has successfully established a dispute settlement panel at the World Trade Organization (WTO) to examine China’s export duties and quotas on 11 raw materials including antimony, chromium, cobalt, copper, graphite, indium, lead, magnesia, talc, tantalum and tin. 

These are “key inputs,” according to USTR, into a wide range of American products including steel, automotive, aerospace, construction and electronics, and the Chinese duties/quotas being challenged are characterized as “unfair” by USTR.

USTR has called for a “special meeting” at the WTO to have the panel established quickly based on concerns over previous objections by China that blocked the first U.S. request for panel establishment. USTR says it’s resolved to “ensure that American workers and businesses receive all the benefits that the U.S. has negotiated under our international trade agreements, and that American products can compete in the world marketplace on a level playing field.” 

This resolve, according to the announcement, is shown by USTR “promptly moving forward with this action.” 

At Issue
According to USTR, China’s export restraint on talc, along with the other key inputs, appears to be part of “a continuing troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of manufacturers elsewhere in the world.”

USTR further asserts that, as a direct result of China’s “position as a leading global producer of these raw materials,” the country’s export restraint measures give it the ability to “affect global supply and pricing significantly.” These measures “can provide important advantages to China’s downstream producers to the detriment of U.S. and other foreign counterparts. These measures also can create substantial pressure on foreign producers to move their operations, jobs, and technologies to China.”

As part of its accession to the WTO, USTR asserts, China committed to eliminating export duties for all products other than those listed in a specific annex. The export duties the U.S. is challenging are imposed on products which are not listed in that annex. USTR additionally notes that China’s WTO Accession Protocol includes commitments on preventing the restriction of rights to export goods.

In making its case for WTO review, USTR points out that two previous disputes brought by the U.S. (China – Measures Related to the Exportation of Various Raw Materials and China – Measures Relating to the Exportation of Rare Earths, Tungsten, and Molybdenum) where China’s imposition of export duties – and export quotas – on two different sets of raw materials were found inconsistent with the country’s WTO commitments. Through this new WTO challenge, USTR says it “seeks to extend and reinforce those important victories.”

Consultations with China were requested by USTR on July 13 and 19, 2016, but did not resolve the dispute. By requesting a WTO review panel, USTR asserts it is simply taking the “next step” in the WTO dispute settlement process to resolve the matter. Based on USTR’s request, the WTO Dispute Settlement Body established a panel to examine the U.S. complaint at a special meeting on November 8, 2016.

“We will aggressively pursue this challenge on behalf of U.S. steelworkers, auto workers, aerospace workers, and the many Americans whose businesses, jobs, and livelihoods depend on the strength of these and other industries,” says USTR ambassador Michael Froman. “China specifically committed to abide by fair, non-discriminatory access to raw materials when it joined the WTO.  We intend to hold them to that commitment to ensure that our workers and businesses get all the economic opportunities they’re entitled to under our trade agreements.”

In other USTR news, the office reported that the inaugural Ministerial-Level Meeting between the U.S. and Argentina’s Council on Trade and Investment was held on Nov. 7 under the United States-Argentina Trade and Investment Framework (TIFA) which was signed during President Obama’s visit to Argentina in March.

The November meeting was co-chaired by Argentina’s Minister of Foreign Affairs, Susana Malcorra, and their Minister of Production, Francisco Cabrera.

Argentina has been selected to host the next WTO Ministerial Meeting in 2017 and – as founding members of the WTO along with the U.S. – used the meeting to renew both country’s “mutual commitment to cooperate on a range of multilateral issues, including WTO dispute settlement, trade facilitation, and reducing global excess steel capacity. The Ministers also discussed their respective trade agendas, and future collaboration on agricultural biotechnology, and on innovation and creativity.”

Another result from the meetings, according to USTR, is that both countries have agreed to establish an Innovation and Creativity Forum for Economic Development to discuss issues of mutual interest, including geographical indications, industrial designs, and the importance of intellectual property protections for small- and medium-sized enterprises.

“The range of issues we discussed today will have a direct and meaningful impact on our two economies, and the many workers and businesses that are essential to their continued growth,” Ambassador Froman noted after the meeting. “I am particularly pleased by Argentina’s support in launching a plurilateral initiative in the WTO to prohibit harmful fisheries subsidies, and its commitment to discuss intellectual property issues that are essential to the success of the United States’ and Argentina’s innovation economies. The progress we made together today will help deepen the United States’ trade relationship with Argentina, for the shared benefit of our two countries.”

Ambassador Froman acknowledged the Argentine government’s settlement of outstanding arbitral awards with two U.S. companies in late 2013, and cited Argentina’s failure to enforce arbitral awards in suspending Argentina from the Generalized System of Preferences (GSP). The Government of Argentina has requested that the U.S. consider re-designating the country as a beneficiary developing country for the GSP program and Ambassador Froman says USTR will initiate a public review process to determine whether Argentina meets GSP eligibility criteria.

According to USTR more than 500 U.S.-based companies are currently operating in Argentina, and two-way trade of goods and services totaled about $23 billion in 2015 with trade in services accounting for approximately $10 billion of the total.