USW Gets WTO Rare Earths Ruling on China's Export Restraints

Affirms Huge Victory for Producers and Workers Around World

Aug 07, 2014, 15:50 ET from United Steelworkers (USW)

WASHINGTON, Aug. 7, 2014 /PRNewswire-USNewswire/ -- Leo W. Gerard, International President of the United Steelworkers (USW) released the following statement on today's affirmative determination by the World Trade Organization (WTO) Appellate Body in a U.S. case against exports of rare earth minerals, tungsten and molybdenum by China.

The WTO case was sparked by a petition filed by the Steelworkers in 2010. Two years later, the U.S., joined by Europe and Japan, challenged China's export restraints on rare earths, tungsten and molybdenum. Today, the WTO Appellate Body agreed with the USW original complaints.

USW President Gerard's statement follows:

"Once again, China has been found guilty of violating international trade rules. Its restraints against exports of rare earth minerals, tungsten and molybdenum were designed to promote production in China and injure producers and workers around the world. It's a big win and some consolation for U.S. workers who have lost work and wages as a result of China's cheating.

"Ambassador Froman, the General Counsel and everyone else at USTR who has been involved in this case from the start have our thanks. They've been diligent, aggressive and effective in the fight against these and so many other Chinese unfair trade barriers. It's an endless fight.

"Rare earth minerals are used in countless products from lighting to high technology products to batteries and auto parts. China's restrictions starved foreign producers of these vital products and raised the price to foreign purchasers. The result was many companies picked up and moved production to China or found that Chinese producers, with access to the minerals, were underpricing them. It was a clear violation of China's WTO commitments.

"China's policies directly affected USW members in factories around the country, and at the only existing U.S. rare earth mine and refinery in Mountain Pass, CA. -- a USW-represented facility with more than 300 miners. China's policies originally depressed world market prices by flooding markets at low prices which helped mothball that facility. In an effort to offer domestic sources of rare earth minerals, the Mountain Pass facility has reopened. But China's actions have resulted in many downstream users of rare earth minerals moving from the U.S.  

"This is the second time that China has been found guilty with its imposition of export restraints.  Today, China applies export restraints on 346 items. But, restraints on only 103 of these products were permitted by the terms of China's accession agreement. U.S. negotiators never should have sanctioned Chinese protectionism in this area, or many others. Today's decision, 13 years after China's accession to the WTO, takes us another step down the road but the journey to get fairer trade with China may never be over.

"Chinese leaders and Chinese companies game the system. China knows that it often takes years to bring them to the WTO and work through the cumbersome process. During that time, they continue to reap the benefits of their illegal acts. The rule of law is simply not respected by China's leaders. That's true for human rights, religious freedom, intellectual property protection, commercial law and all across the board.

"Enforcement is the key to ensuring that the benefits of trade actually reach American workers.   But, that usually means we have been hurt. To prevent it from the start, the most important step is to require that we only engage in trade negotiations with countries that respect the rule of law and that the agreements themselves actually contain rules that will advance American interests.   Existing trade agreements and those being negotiated fail to measure up to these requirements.

"USW members should be proud that their support helped achieve today's global trade policy win.   From tires to paper, steel to oil country tubular goods and many other manufactured products, the USW will continue to fight for jobs here in America. It's a fight we wish we didn't have to wage, but it's a fight we won't back away from."                      

The USW is the largest private-sector union in North America, representing 850,000 workers employed in metals, mining, rubber, paper and forestry, oil refining and renewable energy products, chemicals, health care, and municipal governments. For more:

Gary Hubbard (202) 256-8125;
Wayne Ranick (412) 562-2444;

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SOURCE United Steelworkers (USW)