China Backs Off Over Export Duties

The U.S., the European Union (EU) and Japan have won a trade battle with China.

The Chinese government had a policy that unfairly benefited over 100 Chinese medical technology firms over their foreign counterparts with an export duty that added as much as 300% to the costs on rare earths, tungstens and molybdenum products used for manufacturing medical devices.

As of May 1, 2016, China says it will have eliminated those export duties. Earlier this year China ended its World Trade Organization (WTO)-inconsistent export quotas on those same products.

Under the “Demonstration Bases-Common Services Platform Program, ” China was providing millions of dollars’ worth of grants and discounted services—such as product design, testing and research and development (R&D) services—to the country’s domestic companies, contingent on export, including services to over 100 medical technology firms.

Advanced Medical Technology Association (AdvaMed) new President and CEO Scott Whitaker issued the following statement following the U.S. Trade Representative’s successful challenge of China export subsidies in the WTO.

“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.”

“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, ” Ambassador Froman said in a prepared statement.