. /.   WORLD TRADE  
ORGANIZATION  G/LIC/Q/CHN/18 
30 August 2006 
 (06-4118) 
Committee on Import Licensing Original:   English 
  
 
TRANSITIONAL REVIEW MECHANISM 
PURSUANT TO PARAGRAPH 18 OF THE PROTOCOL ON THE ACCESSION 
OF THE PEOPLE'S REPUBLIC OF CHINA  
 
Questions from the UNITED STATES to CHINA
 
 
  The following communication, dated 14 August 2006,  is being circulated at the request of the 
Delegation of the United States.  
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 Steel and Iron Industry Development Policy
 
 1. During last year’s transitional review of Ch ina before this Committee, the United States 
raised concerns about China’s Steel and Iron Indus try Development Policy (Steel Policy), issued on 
20 July 2005.  The United States explained that the Steel Policy explicitly bans the import of 
“outdated” second-hand steel-manufacturing equi pment and espouses an import substitution policy 
that “encourages” the use of domestically prod uced equipment and domestic technologies.  The 
United States further explained that, according to the Steel Policy, equipment and technology imports 
must meet the requirement of being either “technologically advanced” or fulfilling a demand that 
domestic production is unable to meet.  In res ponse, the representative of China provided some 
helpful clarifications and explained that China had not yet issued any measures implementing these 
aspects of the Steel Policy.  Has China since is sued any regulations, rules or other measures 
implementing these aspects of the Steel Policy?  If so, please identify them. 
Iron Ore
 
 
2. In connection with China’s Trade Policy Revi ew, held on 19 and 21 April, 2006, the United 
States submitted written questions addressing China’ s attempt to regulate imports of iron ore by 
granting import licenses only to enterprises satisfying cer tain criteria.  The United States noted that an 
iron ore importer reportedly can obtain an “automatic” import license from MOFCOM only if, inter 
alia, the importer satisfies criteria set by the Chamber of Commerce for Import and Export of Metals, 
Minerals and Chemical Products and the China Iron and Steel Association.  The United States then 
asked China to explain how it justifies these import restrictions under WTO rules, taking into account 
China’s WTO obligations, including those in Article XI of GATT 1994 and para graph 5 of Part I of 
China’s Protocol of Accession.  To date, China h as not responded to those questions.  The United 
States anticipates that China will submit its Trade Policy Review responses prior to this Committee’s 
27 September 2006 meeting, when China’s Transiti onal Review Mechanism is on the agenda.  The 
United States will review China’s Trade Policy Revi ew responses and may ask follow-up questions in 
connection with China’s upcoming transitional review. G/LIC/Q/CHN/18 
Page 2  
 
  Other Steelmaking Inputs
 
 3. In connection with China’s recent Trade Po licy Review, the United States also submitted 
written questions addressing the extent to which Ch ina applied import requirements similar to those 
on iron ore to other steelmaking inputs, such as ferr oalloys, ferrous scrap, zinc, nickel, aluminum or 
titanium.  To date, China has not responded to t hose questions.  The United States anticipates that 
China will submit its Trade Policy Review res ponses prior to this Committee’s 27 September 2006 
meeting, when China’s Transitional Review Mechanism is on the agenda.  The United States will review China’s Trade Policy Review responses and may ask follow-up questions in connection with 
China’s upcoming transitional review. 
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