China hails partial win against US despite losing appeal in WTO

While Beijing loses appeal at WTO over law targeting subsidies, it takes heart from ruling that finds Washington at fault on penalties

PUBLISHED : Wednesday, 09 July, 2014, 5:19am
UPDATED : Wednesday, 09 July, 2014, 5:19am

China's appeal to overturn a US law targeting unfair trade subsidies at the World Trade Organisation has failed, although the Commerce Ministry claimed a partial victory when the WTO's appeals panel said Washington violated trade rules by double counting the punishment on Chinese goods for being both subsidised and unfairly priced.

It was the latest trade dispute between the United States, the world's biggest economy, and China, the second largest.

The US is China's biggest trade partner, with total trade last year reaching US$521 billion, according to Chinese customs data.

The Commerce Ministry in Beijing said in a statement the result was "another significant victory of China's challenge against the United States' abuse of trade remedy measures".

The dispute was over US Public Law 112-99, also known as GTX legislation, which was signed by President Barack Obama in March 2012.

Beijing had complained that the law "explicitly allows for the application of countervailing measures to non-market economy countries", saying it violated WTO trade rules.

China had also claimed that the US failed to investigate and avoid double remedies in some countervailing and anti-dumping duties.

The WTO panel ruled in favour of the US in March. China appealed and the WTO appeals body disagreed with several of the panel's interpretations of the law, but it did not have enough information to overturn the ruling, effectively leaving the March decision in place.

That allowed both sides to claim victory.

US Secretary of Commerce Penny Pritzker said the WTO ruling "allows US industries to continue to rely on US trade laws to address unfair competition from their subsidised Chinese competitors".

Washington said that the ruling showed it acted within its rights when introducing the GTX legislation.

The Chinese Commerce Ministry statement said the annual value of trade affected was US$7.2 billion. China's exports reached US$2.2 trillion in 2013, while imports amounted to about US$1.9 trillion.

The US law slapped tariffs on products such as photovoltaic cells and modules used in solar power, various steel products, off-road tyres, aluminium goods and towers for wind farms.

The punishment against Chinese products covered 25 anti-dumping and countervailing investigations initiated against China by the US between 2006 and 2012.

China launched the complaint in September 2012 and a WTO panel was established in December that year.

The panel's decision was released in March this year.

China then filed an appeal to the panel in April.

With additional reporting by Reuters