China takes subsidies complaint to WTO

Relations strained as US slaps anti-dumping tariffs on products worth US$7.2 billion

PUBLISHED : Tuesday, 18 September, 2012, 3:27am
UPDATED : Tuesday, 18 September, 2012, 3:37am

China filed a World Trade Organisation case yesterday challenging US anti-dumping measures on billions of dollars of kitchen appliances, paper and other goods, adding to trade strains.

Beijing's move came shortly before US President Barack Obama's administration filed its own WTO case accusing China of improperly subsidising exports of cars and car parts.

China and the US have clashed over complaints about market barriers and subsidies for goods including cars, solar panels, tyres, steel and chicken. Political pressures on both sides are worsening as demand for their goods cools, raising the threat of job losses in export industries.

As campaigning for the US presidency intensifies before the election in November, Obama and Republican nominee Mitt Romney have traded barbs on China, accusing each other of backing policies that would move American jobs overseas.

The Ministry of Commerce said its latest WTO complaint centres on the US Congress's passage of a law this year that retroactively gave the Department of Commerce power to impose anti-dumping duties on Chinese goods.

That came after a US court reversed earlier duties imposed under rules covering countries such as China and Vietnam that are deemed to be "non-market economies".

"This practice puts Chinese enterprises in an uncertain legal environment, in violation of the relevant rules of the WTO transparency and due process," ministry spokesman Shen Danyang said in a statement.

The ministry said the US measures being challenged cover 24 types of products worth US$7.2 billion. It gave no details, but a statement from the WTO in Geneva said they include paper, steel, tyres, magnets, chemicals, kitchen appliances, wood flooring and wind towers.

The Chinese filing requests consultations to settle the dispute, the first stage in a WTO complaint. If no resolution is found after 60 days, Beijing can ask for the case to be handed over to a WTO panel for judgment. Depending on the outcome, China might be allowed to request sanctions.

A car industry analyst based in Beijing said the US complaint about subsidies for exports of cars and car parts could be retaliation against China's move last year to impose additional duties on cars imported from the US.

John Zeng of LMC Automotive said the damage to China would be greater if the US were to impose tariffs on mainland exports of car parts.

"The bulk of US cars sold in China are assembled here, so the impact of the previous Chinese sanctions on imported US cars was not really so great. China, however, exports a lot of auto components to the US," Zeng said.