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May, 26, 2016

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China wins battle in dispute with US over punitive tariffs

GENEVA, Switzerland--Beijing won a key victory Monday in a trade dispute with Washington, as a World Trade Organization (WTO) panel said the United States was wrong to slap punitive duties on a host of Chinese goods.

The battle covered an array of products including paper, steel, tires, magnets, chemicals, kitchen fittings, flooring and wind turbines.

The United States had hit them with extra import duties because it argued that they were being dumped on its market to help Chinese companies grab business.

China filed a complaint over the measures at the WTO in 2012.

A World Trade Organization dispute settlement panel on Monday said that the U.S. duties were "inconsistent" with global rules.

"They have nullified or impaired benefits accruing to China," said the panel, which is made up of independent trade and legal experts.

"We recommend that the United States bring its measures into conformity with its obligations," it added.

In a statement issued by its diplomats at the WTO, China's ministry of commerce hailed the decision, noting that the annual export value of the affected products was around US$7.2 billion.

"China urges the United States to respect the WTO rulings and correct its wrong doings of abusively using trade remedy measures, and to ensure an environment of fair competition for the Chinese enterprises," it said.

The WTO polices global trade accords in an effort to provide its 160 member economies with a level playing field.

Members have the right to impose extra duties when goods are being "dumped" on them or sold at below market prices to corner a share of business unfairly.

But hand in hand with that right, they are obliged to prove that their domestic producers are suffering as a result of dumping, and that the duties are not simply being deployed to protect them against foreign competitors.

Wrangling over dumping is common at the WTO, whose panels can authorise retaliatory trade measures against a guilty party that fails to fall into line.

The WTO disputes settlement process can last for years, amid appeals, counter-appeals and compliance assessments.

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