Sun, May 27, 2012 - Page 11 News List

Trade war between US, China heats up

BIG STAKES:US trade officials said the timing of the complaint, just days before it is to make a major decision on trade policy, shows China does not care about the outcome

Reuters, GENEVA, SWITZERLAND

China launched on Friday a complaint at the WTO against US import duties on 22 Chinese products that the US says are unfairly priced or subsidized, including solar panels and steel products.

“China firmly opposes the abuse of trade remedy measures and trade protectionism,” China’s Ministry of Commerce said in a statement.

China’s complaint counterattacks in areas where the US has hit Chinese products with punitive tariffs, known as anti-dumping duties or countervailing duties, in recent years.

In Washington, US trade officials criticized Beijing for bringing the case because they said the US Commerce Department was already working to address issues raised by China and which stem from an earlier WTO appellate panel ruling.

“China’s resort to dispute settlement is premature and not an appropriate use of dispute settlement system resources,” said Nkenge Harmon, a spokeswoman for the US Trade Representative’s office.

“This step by China suggests that China does not really care what the US does; rather, China has determined without benefit of the facts that whatever the US does will fall short of what China would like to see,” Harmon said.

ELECTRONIC PAYMENTS

Beijing launched the action the same day that a WTO panel issued a confidential ruling in a high-stakes case aimed at prying open China’s huge electronic payments market for US firms like Visa, MasterCard and American Express.

Visa, MasterCard and American Express also declined comment on the case, which dates to late 2010 and challenges China UnionPay’s (中國銀聯) domestic monopoly over electronic payment services.

The US argues China failed to follow through on its commitment to allow foreign companies to -offer electronic payments services by December 2006, five years after its entry into the WTO.

China said its complaint covers exports worth US$7.3 billion, encompassing products like citric acid, kitchen shelving and lawn groomers. It also includes wind towers, even though the US Commerce Department’s preliminary decision on those wind tower imports is not due until Wednesday.

Eight days ago, the US Commerce Department set punitive tariffs on Chinese solar panels, which it said Chinese exporters had dumped on the US market at unfairly low prices.

The US hit Chinese steel pipe imports with hefty anti-dumping duties in 2010. Later that year, it launched a trade suit over Chinese government grants to wind power manufacturers, but it did not pursue the case.

Harmon said the Office of the US Trade Representative was studying the complaint and would respond in accordance with WTO rules.

“The [US President Barack] Obama administration strongly supports the trade remedy laws, and was the first administration ever to apply a 421 safeguard to imports from China,” she said.

A 421 safeguard is a US measure that allows manufacturers to request emergency restrictions on Chinese imports in response to a surge.

SEVENTH COMPLAINT

China’s new complaint, the seventh it has filed against the US since it joined the WTO in 2001, comes as WTO director-general Pascal Lamy flies to China for a four-day visit, during which he will meet Chinese Vice Premier Wang Qishan (王岐山).

The legal process begins with China holding talks with the US to seek an amicable settlement.

It may move to arbitration if the two cannot agree, and the US could be forced to scrap its duties and even compensate China if it is found to have broken the rules.

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