Among the small handful of WTO disputes involving China, China has won important WTO rulings. The inescapable conclusion is that China obeys WTO rules and other nations are complaining without merit. Competition does not guarantee equal outcomes, only equal opportunities.
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Trade Body Rules in Beijing's Favor
By JOHN W. MILLER
MARCH 12, 2011
WTO Judges Say U.S. Illegally Imposed Double Duties on Chinese Exports Limits Trading Partners' Room to Maneuver
BRUSSELS—The World Trade Organization handed an important victory to China, ruling that the U.S. illegally imposed both antidumping and antisubsidy duties on some Chinese exports in 2007.
The trade body's surprise decision sets a precedent in limiting the ability of China's trading partners to impose punitive duties on its exports.
China, the world's biggest exporter and its second biggest economy, faces its biggest wave of trade disputes at the WTO since it joined the Geneva-based organization in 2001.
A security guard walks among the containers at Yangluo Container Port on the Yangtze River in Wuhan in central China's Hubei province. (Photo credit: European Pressphoto Agency)
Led by the U.S. and the European Union, China's trading partners are fighting what they say is an export machine often lubricated by state subsidies and aggressive dumping of goods below cost on foreign markets. And they complain it's a one-way street: China had $1.6 trillion of exports in 2010, with a trade surplus of $184.5 billion.
China has reacted to the trade legal war by hiring teams of consultants and expert counsel in Geneva, Brussels and Washington. It has become difficult for a reporter covering trade to find a lawyer not retained on some level by China or one of its exporters.
The WTO recently issued two significant rulings against China, finding that it improperly imposes export tariffs on raw materials in order to protect domestic supplies, and ordering China to bust a state-backed monopoly on processing some credit-card payments.
The most recent case dates back to the U.S. imposing punitive tariffs of up to around 20% on Chinese steel pipes, tires, and laminated woven sacks in 2007. A year later, China complained to the WTO that the U.S. had acted illegally. In October, the WTO rejected those claims.
Beijing appealed, arguing the U.S. couldn't legally impose two different classes of punitive duties—antidumping and antisubsidy— on the same goods. Antidumping duties punish dumping, the selling of goods below cost in a foreign country, while the latter compensate for government aid, such as grants and low-interest loans.
Typically, antidumping duties are levied on countries that are not designated as "market economies," because some subsidies are assumed in those countries. Instead, the WTO permits importers to calculate probable cost of the good using another country as a reference. For China, it is often another emerging economy such as Turkey or Mexico. Most countries, the U.S. included, don't consider China a market economy, and therefore usually don't apply antisubsidy duties. The EU has never imposed antisubsidy duties on China. Beijing has been campaigning hard for market-economy status from both the U.S. and EU because it would make it harder for those countries to levy antidumping duties.
In its 232-page report, the WTO's judges said that the U.S. couldn't apply both kinds of duties.
"The Appellate Body's decision on the 'double remedies' issue is likely to cause concern" among U.S. manufacturers and labor unions who lobby the government to impose duties, said Simon Lester, founder of WorldTradeLaw.net LLC, a Washington consulting firm.
U.S. Trade Representative Ron Kirk reacted angrily to the ruling by the WTO. "I am deeply troubled by this report," he said."It appears to be a clear case of overreaching by the Appellate Body." The U.S., he added, is "reviewing the findings closely in order to understand fully their implications."
The U.S. must now comply with the ruling by removing some of the duties and change its methodology for future cases.
U.S. trade officials pointed out that the WTO panel upheld some parts of the U.S. case, including the finding that certain banks that gave loans to the exporters were "state bodies."
China welcomed the ruling. The panel, a government statement said, "has conclusively established that the United States acts unlawfully in the methods by which it calculates and imposes countervailing duties on imports from China."
Write to John W. Miller at
[email protected]"
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China Wins Duties Case Against EU in WTO Courts
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Dec. 7, 2010 – In a case that displays China’s increasing engagement with international bodies, the World Trade Organization ruled last Friday that the European Union’s antidumping duties on Chinese steel fasteners such as screws and bolts work against WTO regulations.
“We recommend that the dispute settlement body request the European Union to bring its measure into conformity with its obligations,” it said.
China brought the case to the WTO in July 2009 after the EU imposed tariffs, ranging from 26.5 percent up to 85 percent, on some imports of Chinese steel and iron fasteners.
The WTO disputed calculations that the EU undertook to determine whether Chinese goods were being “dumped” below the cost that they took to be made.
The EU has repeatedly argued that it has the authority to make such calculations that are based on statistics from other nations, because China does not qualify as a market economy.
China’s Ministry of Commerce welcomed the ruling, saying “China urges the EU to respect the WTO ruling and quickly end the practices.”
China joined the WTO in 2001 and since then has played an increasingly large role in WTO litigation. In the past, China has also won some cases against the United States for its own tariffs against Chinese imports, but
Friday’s WTO decision was China’s first win against the EU.
Due to China’s role as the global source of low-cost manufacturing, roughly a quarter of anti-dumping duties globally have been directed towards Chinese exports over the last decade, according to the Financial Times.
Both sides to the case have 60 days to appeal the ruling."
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China gets WTO backing in chicken import row with US
Posted by CBN on Jul 29th, 2010
China has notched up a victory against the United States after a World Trade Organization (WTO) panel ruled in China’s favor in a dispute over the ban on imports of Chinese chicken, sources close to the matter said on Wednesday.
The ruling is expected to come into effect soon and will help open up the US market for finished chicken breast exports, the sources said. The nation is already a major exporter of chicken products to Japan.
The WTO said in June, in an interim ruling, that the US decision was in violation of its rules and regulations.
Commerce Ministry officials said China got the final ruling from the WTO on Tuesday, but the trade body did not disclose the result and other details, citing confidential reasons.
“It (final ruling) will be announced in one or to two months, and the result is actually China wins,” said an unnamed source.
In April 2009, China lodged an appeal with the WTO against Section 727 of the Omnibus Appropriations Act of 2009, included in US laws from March 2009. China argued that the Section 727 runs against rules of the global trade arbitrator and consequently the WTO set up a dispute settlement panel in July 2009.
Under the Section 727, the United States effectively prohibits the establishment or implementation of any measures that would allow poultry products to be imported from China.
“Such rules are nothing but trade protectionist measures as they block China’s chicken product exports to the US,” said Ma Chuang, deputy secretary-general of the China Animal Agriculture Association.
Ma expressed confidence that once the ruling comes into effect it will boost exports of finished chicken products. “We expect to start seeing modest annual export volumes of 100,000 to 150,000 tons of finished chicken products valued at around $500-750 million roughly. It will in no way impact US poultry farmers or manufacturers of finished products,” he said.
In 2009, China exported poultry products worth $870 million or 291,272 tons, compared with $860 million in 2008. It imported 799,600 tons of chicken products globally in 2008."
