US wins trade case over steel exports to China

U.S. trade officials announced Thursday that the World Trade Organization (WTO) has rejected China's appeal in a case over duties imposed on high-tech steel exports. 

U.S. Trade Representative Ron Kirk said the WTO's Appellate Body ruled that Beijing had acted inconsistently with its trade obligations by illegally imposing duties on anti-dumping and countervailing duties on grain oriented flat-rolled electrical steel (GOES).

"The Obama administration will not stand by and allow China to break international trade rules," Kirk said.  

"Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of U.S. products.” 

China’s duties choked off nearly all U.S. GOES exports as they fell from $270 million in 2008 to less than $3 million last year, according to USTR. 

Ohio-based AK Steel Corporation and Allegheny Ludlum in Pennsylvania, manufacture the steel that is used primarily in the power-generating industry.

Ohio and Pennsylvania are battleground states in the presidential race. 

President Obama and GOP hopeful Mitt Romney sparred during Tuesday night's debate over U.S. policy toward China. 

Romney said he will crackdown on China and label the nation a currency manipulator while being more forceful in pressing Beijing to stop stealing intellectual property and

Obama, meanwhile, argues that his administration has significantly boosted its efforts to push China to let its currency appreciate, protect intellectual property, unwind its indigenous innovation system and allow for more foreign investment.  

The U.S. has won cases on intellectual property rights that would further open China's financial services market and it continues to press Beijing to ease export restrictions on rare earth materials needed for electronics such as cell phones. 

Obama also created a new interagency trade enforcement unit to investigate and file more trade cases, against China or other nations that don't comply with global trade rules. 

Scott Paul, executive director of the Alliance for American Manufacturing, said he is certain that the WTO will also rule against China for its attempted retaliation against American auto and poultry producers. 

"The lesson is clear: asserting our rights to trade enforcement is effective, and the U.S. will win these cases," he said. 

"We need to continue to stand up for American workers and businesses and challenge the unfair trade practices of China and other nations."

In September 2010, the United States brought the case against China after Beijing filed antidumping and countervailing duty investigations on GOES from the United States, arguing the product was selling in their market at unfairly low prices. 

A WTO panel first sided with the United States in June. On Thursday, the panel rejected China’s claims that the panel misinterpreted the agreement allowing them to impose duties.  

In particular, the appellate upheld the panel's June findings of defects in China’s determination that U.S. exports caused adverse price effects, as well as findings that China failed to disclose essential facts, and failed to explain its determination.