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'Buy American' violates WTO rules, official warns

By Jiang Wei (chinadaily.com.cn)
Updated: 2009-02-23 18:55

A top official in China's steel industry warned on Monday that any "Buy American" clause in the $787 billion US stimulus package would violate the rules of the World Trade Organization (WTO).

The "Buy American" clause in a bill that US President Barack Obama made law last week, required that all public works projects funded by the stimulus package use only made-in-US iron, steel and manufactured goods.

Related readings:  'Buy American will do more harm'  US stimulus plan may create trade barriers  China seeks slimmer, more efficient steel sector  Foreign trade plummets 29% in January

"Such a clause violates the rules of the World Trade Organization," Luo Bingsheng, vice-chairman of China Iron and Steel Association, said in an interview in Beijing.

"It is an act of discrimination against steel products not from only China but other economies, such as Japan, South Korea and Europe," he warned.

Earlier this month, China's commerce ministry spokesman Yao Jian said the nation is against protectionism in any form.

"We believe that protectionist measures will make the already bad conditions of the financial crisis even worse," he said, warning that some countries had already taken measures that would hamper trade and slow the global recovery.

Luo pointed out that US steel output falls short of annual domestic demand by between 20 million and 30 million tons.

According to the latest statistics from the US Census Bureau, the US imported 432,494 tons of steel from China worth $677 million in December 2008.