US plan meets WTO obligations

Comments by the China Iron and Steel Association (CISA) reported in your article of February 24, "Obama stimulus ruffles industry," are completely inaccurate. Your readers need to hear the true facts.

As WTO Director-General Pascal Lamy said this week, the Buy American provision in America's stimulus plan is being implemented "in a way that is consistent with US WTO obligations." This directly refutes the comment by CISA's Luo Bingsheng that it "violates WTO rules."

You also report that China's commerce ministry "is against protectionism of any kind". If this were true, China would not continue to heavily subsidize its steel industry and it would stop controlling the value of its currency, which economists estimate gives China a 35 percent advantage over competitors in other nations. CISA also attacks the stimulus plan as being "inaccessible to Chinese steel products". As a corollary to that and given the anti-competitive barriers in place, is CISA suggesting that China's $586 billion stimulus package is designed to generate demand for European or US or Japanese steel? I suspect not.

As your own newspaper has reported, China is suffering during the global recession with an estimated 160 million tons of surplus steel production. As a result, surging Chinese finished steel imports are taking an inordinately high share of the US market. In the face of a recession-driven decline in US domestic steel demand and shipments, we will continue to strongly advocate for rules-based trade and zero tolerance of unfair trade in the US market.

Thomas J. Gibson, President and CEO of American Iron and Steel Institute

(China Daily 03/16/2009 page2)