China angered by US trade investigations
Updated
Trade relations between China and the United States appear to be souring again, following strong statements by Beijing, accusing the US of abusing WTO rules.
China has expressed concern over a series of anti-dumping, anti-subsidy investigations by the US, over several Chinese made steel products.
Presenter: Girish Sawlani
Speakers: Alan Oxley , former Australian ambassador to GATT;
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SAWLANI: China's Ministry of Commerce says it is gravely concerned with the frequency of US investigations into Chinese steel products.
Over a period of just ten days the US department of Commerce ordered three dual investigations into Chinese made Wire trays, Steel Gratings and stranded steel wire - a move Beijing says has angered China's steel producers. In a statement from China's Commerce ministry, senior official Zhou Xiaoyan has accused the United States of abusing WTO rules.
MINISTRY STATEMENT: This is an abuse of the trade remedy measures, when the US filed the investigation it did not check carefully if these cases were tenable. We hope the US will fully abide by the WTO rules and file probes according to the rules.
SAWLANI: The statement also warned that Washington's actions would damage Sino-US trade relations.
MINISTRY STATEMENT: Such practice is sending wrong signals of trade protectionism to the US domestic market and the international society and could seriously affect the interests of the downstream part of the US steel industry, while damaging the normal steel trade between the two countries.
SAWLANI: But in early June, Beijing launched its own anti-dumping probe on imports of US made electrical steel, accusing the Americans of under-pricing. International trade analysts are viewing this as a tit for tat skirmish. Alan Oxley is Australia's former Ambassador to the WTO's precursor, GATT and now heads the public policy consultancy ITS global.
OXLEY: This sort of thing happens and I think the Chinese are probably right to be getting a little irritated, I mean US steel industry's got a tradition of getting Congress and the government to push against more competitive exporters when times are tight and that's what's happening. There's been quite a lot of pressure from the US steel industry to do something about significant increases of Chinese exports of steel, China's exports have risen dramatically all around the world. However to date it looks like the subsidies if they are paid aren't that significant. China's just a more competitive steel producer.
SAWLANI: With China likely to increase its steel exports to the international market there could be serious implications for other steel producing countries, including Australia. Alan Oxley again.
OXLEY: Australian steel producers are feeling the pinch, they're finding it difficult to compete with the lower priced Chinese imports. The real concern among the other producers is that China may decide if domestic production falls that they need to continue to keep the income coming in from their exports that they might actually start in fact increasing their exports to the global market to compensate. That would really cause quite a bit of pressure and attention in world steel markets. Now to date Chinese have been careful not to do that, they've even in fact tried to restrain some of their exports a little bit, but it's certainly a pretty tense time for the rest of the world's steel market.
SAWLANI: Despite the apparent hostilities from both sides, Alan Oxley says it won't lead to a full blown trade war.
OXLEY: Both sides are using established process to if you like play some politics with this rather than just unilaterally acting. That's a good sign, that means they'll either go through WTO or the hearings have got to be heard through the US Trade Commission. So I think what we might find is what we call skirmishing rather than a trade war, and I suspect it'll probably continue for a bit but I think it'll be contained within these sort of organised processes for settling these disputes.
