The American Iron and Steel Institute (AISI) this week submitted comments to the inter-agency Trade Policy Staff Committee, led by the US Trade Representative (USTR), outlining specific instances where "foreign government laws, policies, and practices ...severely distort global trade and are of particular concern to AISI and its members."
The more than 40 pages of comments, signed by Kevin Dempsey, senior vice president of public policy for AISI, were submitted in response to a solicitation for comments in preparation for the 2014 National Trade Estimate (NTE) Report on Foreign Trade Barriers. The comments on behalf of the steel industry cited export and import barriers, subsidies and foreign government ownership of the steel industries in some countries, and other barriers to fair trade:
"In its annual NTE Report, USTR identifies a variety of foreign trade barriers, including export restrictions, import barriers, investment barriers, subsidies and anticompetitive conduct of state-owned enterprises. Such restrictions are extremely harmful to U.S. companies. They restrict U.S. steel producers' access to raw materials and create an un-level playing field in international competition by unfairly advantaging certain countries' manufacturers," AISI wrote.
The comments highlighted:
Export barriers - AISI noted that many countries, including China, India and others, have enacted substantial raw material export barriers in order to ensure an abundant domestic supply at low prices, for their manufacturers. Examples of these barriers include export quotas, export taxes, and export licensing requirements. He said many of these trade obstacles violate WTO agreements, and all of them adversely impact U.S. manufacturers and the entire global economy.Import barriers - Tariffs and other import charges, quantitative restrictions, import licensing, and customs barriers, can distort trade by protecting a country's domestic producers from import competition. Citing China, Argentina, Brazil, Russia and Japan, manufacturers in these countries receive a price advantage over similar imported goods (while raising revenue for the foreign government). Government subsidies and/or government ownership of the industry--AISI said heavily subsidized foreign producers, particularly in the steel industry, can more easily retain and grow market share in their home markets. As a result, it can allow these producers to sell at below-market prices at home and abroad, making it more difficult for U.S. exporters to compete in those markets. The Institute added that state owned enterprises (SOEs) cause market-based U.S. steel companies to compete in global markets against foreign governments, rather than against similarly-situated foreign companies. AISI noted that the steel industries in China, India, Russia, Brazil, Indonesia and Turkey are either heavily subsidized or owned--either in part or all--by their governments.
