China gains WTO support in its challenge to US tariffs
Updated: 2014-07-15 11:52
By Li Jiabao and Yao Jing in Beijing and Amy He in New York (China Daily USA)
China won support from the World Trade Organization (WTO) in challenging United States' trade measures against Chinese products, while experts warned about underlying trade frictions between the world's two biggest economies.
The WTO on Monday issued a panel report on the US imposition of countervailing duty measures on 22 products from China. The WTO backed China "on many aspects such as the identification of public body and found the US measures breach the WTO rules, which is welcome to China", said the Chinese Ministry of Commerce in a statement on its website.
Li Chenggang, director-general of the Ministry's Department of Treaty and Law, told reporters in Beijing that the result was "within expectations" in view of the WTO's favorable ruling in a similar case in March 2011.
"The panel ruling marks one more victory for China in challenging the US discriminative countervailing duty measures on Chinese products. This will further constrain the US misuse of trade remedy measures and benefit Chinese enterprises," Li said.
He added that the ruling will "directly shake the legal basis of imposing countervailing duties" while it holds China as a nonmarket economy.
The US countervailing measures on the Chinese products could endanger exports of $7.2 billion a year, the ministry said.
In May 2012, China requested consultations with the US on the imposition of the countervailing duty measures, and a WTO panel was set up in September 2012 to look into the dispute. The US can appeal the panel report's ruling within 60 days.
Gary Hufbauer, a senior fellow at the Washington-based Peterson Institute of International Economics, said that the panel decision could be a "big win" for China if the US loses its appeal, which he said it almost will definitely do.
"At this stage, it's a win for China, pending through all the legal details," he said. "China has been both a petitioner and a respondent - they bring a lot of cases and they get hit with a lot of cases - but this [case] is special in terms of the dollar value. This $7 billion is a lot."
"The favorable parts of the panel report are surely good news to China. But there is still a long way to go for China to fight against US countervailing measures on Chinese products," said Chen Weidong, a professor at the Law School of the University of International Business and Economics in Beijing.
Economic ties between the two countries are showing friction. On July 8, China's Commerce ministry said it would re-investigate chicken products from the US one day before the expiration of the WTO's ruling on the product.
On July 7, the world's top trade body issued a report of the appeal regarding the US anti-dumping and countervailing measures on 24 products from China. The WTO ruled the US moves "to be inconsistent with" the WTO rules.
But the WTO was unable to rule on whether a US trade-remedy law - which was signed by US President Barack Obama in March 2012 and commonly known as GPX Legislation - was consistent with world trade rules. The US enacted the legislation to allow its Commerce Department to apply countervailing duties to imports from nonmarket economy countries, including China.
"On the whole, the trade disputes between China and the US are set to increase and become more complicated in view of the huge trade flows. What's more, there will more fights over the rules and standards affecting trade flows," Li Hui, a deputy director of the Trade Remedy and Investigation Bureau at China's commerce ministry, said in a recent news briefing.
"China's challenge to the US domestic laws aims to bring the wrong measures of the US, a global trade leader, into conformity with the WTO rules, which is of great meaning to us," she added.
Zheng Yuesheng, spokesman of China's General Administration of Customs, cited this year's resurgent trade protectionism for hurting China's export expansion. In May, the US launched as many as six trade remedy moves against Chinese exports, Zheng said.
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(China Daily USA 07/15/2014 page1)