USTR convinces WTO to enforce ban on Chinese export subsidies

Medtech industry group Advanced Medical Technology Association today touted the decision of U.S. Trade Representative Michael Froman to challenge Chinese export subsidies with the World Trade Organization.

Rep. Froman said that last year the U.S. and several partners achieved a “major victory” at the WTO against Chinese policies that raised costs for Americans by up to 300% on rare earths, tungsten and molybdenum products used for manufacturing devices such as hybrid car batteries, wind turbines and lighting.

China announced that as of May 1, it will have eliminated those export duties, and earlier this year China ended its WTO-inconsistent export quotas on those same products. The work was based on challenges from the U.S., the European Union and Japan, Froman said.

“The Obama Administration is committed to fighting for American workers and standing up for our rights. We’ve shown once again that vigorous trade enforcement can and does produce real results.  The Chinese duties and quotas that will now stop had forced American manufacturers to pay as much as 300 percent more than what their Chinese competitors pay for the same materials. We will be closely monitoring China’s actions to ensure that these illegal policies are in fact discontinued and that China fully complies with its obligations,” U.S. Trade Representative Michael Froman said in a prepared statement.

In August last year, the WTO agreed with the U.S. in a major dispute with China, finding in favor of U.S. claims that China’s export quotas and duties on the items breached WTO rules, according to Rep. Froman. The victory followed a separate challenge in 2012 on China’s trade-distoring export restraints that affected 9 other key materials, Froman said.

“AdvaMed applauds U.S. Trade Representative Ambassador Michael Froman for his insistence that China eliminate export subsidies provided under the country’s ‘Demonstration Bases-Common Services Platform Program.’ In successfully challenging this program in the WTO, Ambassador Froman demonstrated USTR’s commitment to enforcement of existing trade agreements. Under this program, China was providing millions of dollars’ worth of grants and discounted services – such as product design, testing and R&D services – to the country’s domestic companies, contingent on export, including services to over 100 medical technology firms. Not only did USTR’s action stop the current program, but it likely prevented even more Chinese government money from being poured into unfair competition against AdvaMed member companies,” AdvaMed CEO Scott Whitaker said in a press release. “AdvaMed supports trade agreements that lower barriers to global markets and level the playing field for industry across borders to help ensure patient access to life-changing medical innovations. But enforcement is an essential element of these agreements, to stop unfair practices and ensure fair competition.”

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