To say the least, this is not even the tip of the iceberg (ingot). A lot more of this tale needs to be told before one offers more than the most obvious comments. One related issue, for example, has to do with China's goal and expectation of having its goods treated by the U.S. and others as products of a market economy. Today they are often regarded as coming from a non-market economy for the purpose, for example, of calculating anti-dumping duties.
We expect to turn to that issue next week. However, if you want a head-start, it would be hard to find a better primer on the issue than the one provided by
Gary Hufbauer of the Peterson Institute in his testimony at the same February 24 China Commission hearing.
As for the legal context and recommendations in Mr. Stewart's remarks, we were struck by the contrast between a fundamental observation he made and his final recommendation.
The observations was that:
"[T]here are no multilaterally agreed rules to address situations of massive global excess capacity in a rapid or comprehensive manner."
His last recommendation was:
"Finally and perhaps most immediately, the Obama Administration could self-initiate trade cases under Title VII of the Tariff Act of 1930 (antidumping and countervailing duty laws) on a broad basis and/or request the initiation of safeguard actions ..."
All of that, at least for this reader, boils down to saying, Okay, the WTO doesn't really address the problem, but it does offer some remedies, and for now those are the ones we have to use.
To return just briefly to today's Wall Street Journal article, we don't doubt, as the article makes clear, that China's overcapacity in aluminum and steel are a problem for China and that the Chinese leadership is trying to address it. Arguably, however, it is an even greater problem for the U.S. and others.
Adapting the Spanish adage of hospitality to the current situation engenders the thought:
Su problema es mi problema. Alas.
