US Gets WTO Panel On Chinese Anti-Dumping Duties

On October 23, the World Trade Organization (WTO) agreed to establish a panel to examine the complaint by the United States against China’s imposition of anti-dumping and countervailing duties on more than USD3bn in exports of American-produced cars.

The US originally requested consultations with China with respect to the duties on July 5, 2012, and, as those consultations held on August 23 were unsuccessful in resolving the dispute, requested on September 17 that the WTO should constitute a dispute settlement panel.

In May 2011, China’s Ministry of Commerce had issued final determinations in which it found that imports of American-made cars and sport utility vehicles (SUVs) had been sold at less than fair value into the Chinese market and had also benefited from subsidies. Subsequently, in December 2011, China began imposing both anti-dumping and countervailing duties on imports of those automobiles.

The antidumping duties range from 2.0% to 21.5%, and the countervailing duties range from 6.2% to 12.9%, and were imposed for an initial period of two years to December 14, 2013. The specific products affected by the duties are American-produced cars and SUVs with an engine capacity of 2.5 litres or larger. Last year, the US exported more than USD3bn of these automobiles to China, covering more than 80% of US car exports to China.

The US has alleged that China initiated investigations that appear to have involved “profound procedural and substantive deficiencies,” through being conducted without sufficient evidence, failing to examine the evidence objectively, and making unsupported findings of injury to China’s domestic industry. In addition, the US has found that China failed to disclose “essential facts” underlying its conclusions, failed to provide an adequate explanation of its conclusions, improperly used investigative procedures, and failed to require non-confidential summaries of Chinese company submissions.

On hearing of the establishment of the panel, the United States Trade Representative Ron Kirk commented that the US “will not stand idly by while China misuses trade remedy procedures and puts American jobs at risk. As we have demonstrated in numerous cases, we are serious about holding China accountable to its WTO commitments and ensuring that there is a level playing field for American workers and businesses.”

On the other hand, China said it regretted the request for the panel since it had hoped to solve the matter bilaterally through negotiations. The imports at issue were “dumped on the Chinese market and were subsidized by the US, causing injury to the domestic industry of China”, it said. China claimed to have acted in a manner consistent with its WTO obligations.

The dispute over American car imports into China is only one of numerous outstanding trade disputes between the two countries. The US has already challenged duties that China had imposed to restrict imports from the US of grain oriented flat-rolled electrical steel (in which the US was successful at the WTO Appellate Body earlier this month) and chicken products (in which the panel proceedings are still on-going).

The US has also, for example, brought actions against China’s export restraints on several industrial raw materials, China’s restrictions on electronic payment services, and subsidies to the wind power equipment sector. In addition, the US has imposed anti-dumping duties on imports of Chinese solar cells, requested consultations on China’s auto and auto parts subsidy, and invoked a China-specific safeguard to address rapidly increasing imports of Chinese passenger and light truck tyres.

October 28, 2012

Source: Tax News