World Trade Organization Gives Steelworkers, U.S. Big Win Vs. Chinese Export Restrictions On Key Industrial Materials

PITTSBURGH—In what the Steelworkers say is a big win, the World Trade Organization ruled for the U.S., in a complaint the union originally brought, outlawing Chinese export restrictions on valuable industrial materials: Rare earths, tungsten and molybdenum.

Steelworkers President Leo Gerard and Obama administration U.S. Trade Representative Michael Froman jointly announced the WTO ruling on August 7.

“Once again, China has been found guilty of violating international trade rules,” Gerard said.  “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.”

“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, Calif.,” where the union represents more than 300 miners, Gerard added.  The union originally filed its case with the USTR in 2010 after China first flooded the market with low-cost rare earths, which forced the owners of that mine to mothball it.

Though Mountain Pass later reopened, since the rare earths are needed for countless products ranging from lighting to batteries to auto parts to high-tech materials, many users of rare earths were forced to move from the U.S., and often to China, Gerard added.  That cost U.S. jobs.  “Chinese leaders and Chinese companies game the system,” Gerard explained.

“China knows 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.”

In 2012, China switched to restraining exports of the key materials.  That “caused a spike in world prices and considerable disruption in the world market,” and brought the federal government and other industrialized nations into the fray against China, Froman said.

Earlier that year, the U.S. successfully challenged China’s export restraints other raw materials used in making steel, aluminum and chemicals: Bauxite, coke, fluorspar, magne-sium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc, he noted.

Gerard praised Froman’s office for being “diligent, aggressive and effective” in battling Chinese unfair trade.  He called it “an endless fight.”  But he said the two wins are not enough.  China restrains exports of 346 items though the treaty letting it into the WTO lets it restrain only 103 of them. “The journey to get fairer trade with China may never be over,” he warned.

And the best way to enforce fair trade rules is to stop unfair trade before it starts – and hurts U.S. workers – by bargaining only with nations “that respect the rule of law” and signing only pacts that truly advance U.S. interests, including workers’ interests, Gerard adds.