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US hails WTO win over China payment services

WASHINGTON -- The United States welcomed Monday a WTO decision upholding its claim that China discriminates against U.S. suppliers of electronic payment services, including credit and debit cards.

U.S. Trade Representative (USTR) Ron Kirk said the victory in the World Trade Organization (WTO) dispute would allow U.S. companies to compete on a level playing field with China's own company, China Union Pay, which has dominated the EPS market.

“The WTO panel agrees that China's pervasive and discriminatory measures deny a level playing field to American service providers, which are world leaders in this sector,” Kirk said.

“This decision will help U.S. companies and increase American jobs as a more efficient credit and debit payment system in China enables consumers to buy more goods, including quality, made-in-America products,” he said.

According to industry estimates, the United States will gain 6,000 jobs related to electronic payment services, the Obama administration said.

Most of the world's top providers of electronic payment services for credit and debit card transactions are headquartered in the United States.

White House spokesman Jay Carney welcomed the announcement as “another clear win for the United States in a trade dispute with China.”

Traveling with U.S. President Barack Obama to Ohio, a key battleground state for Obama's re-election bid, the spokesman praised the president's trade policies with the Asian giant.

“Today's win highlights that tackling unfair Chinese trade practices has been a priority of this president” since he took office in January 2009, he said, according to a pool report.

The WTO trade victory came less than four months ahead of the Nov. 6 election as the Democratic president fends off criticism from Republican rival Mitt Romney's pledge to get tough with China over its massive trade surplus.

Romney has said that would declare China a currency manipulator, paving the way for sanctions, on his first day in office.

Obama accuses Romney of outsourcing American jobs to China and elsewhere while he was in charge of investment company Bain Capital.

The administration launched the electronic payment services case against China with the WTO in September 2010, with a request for consultations.

In February 2011, the U.S. requested the WTO set up a dispute settlement panel in the ongoing row with China, where more than US$1 trillion EPS transactions are processed each year.

Tim Reif, USTR general counsel, said the WTO panel's final report Monday found in favor of the United States “with respect to each aspect” of the complaint of discrimination.

The United States “scored a decisive victory in this dispute,” Reif said in a teleconference with reporters.

It sends a signal that the U.S. “does not intend to sit still” and allow China to flaunt its WTO trade obligations.

The WTO found that China had violated trade rules in its regulations that also entrenched China Union Pay as the dominating force in the market.

Violations were found on China's requirements on EPS related to banks issuing or doing business with merchants, as well as on the processing equipment and automated teller machines (ATMs).

Both sides have 60 days to appeal the WTO decision.

July 18, 2012    alistairsmith@
We already know that the Chinese are a discriminatory, racist breed of hogs for 5000 years...
July 19, 2012    billparkhurst@
The entire credit industry is corrupt and the fees charged are excessive. For international transactions double charging is commonplace. If the USA wants to change Chinese practice then they should clean their own house also.
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In this July 22, 2010 file photo, a Chinese woman poses with a handful of credit cards and a 100 yuan banknote in Beijing. The United States welcomed Monday, July 16 a WTO decision upholding its claim that China discriminates against U.S. suppliers of electronic payment services. (AP)

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