US blocks China trade dispute at WTO

US blocked the creation of a panel at the World Trade Organisation to resolve a dispute launched by China over U.S. measures.

US blocks China trade dispute at WTO

The United States blocked the creation of a panel at the World Trade Organisation (WTO) on Monday to resolve a dispute launched by China over U.S. measures against imports of certain steel pipes, tyres and woven sacks.

But the row between the two trading giants is bound to fan fears of protectionism. Economists say the failure of the WTO to reach a new trade deal this year will encourage states to turn to litigation to protect jobs from cheap imports.

"The United States strongly urges China to reconsider its decision to pursue a panel in this dispute, and we are not in a position to agree to the establishment of a panel at this time," the United States said in a statement to the WTO's Dispute Settlement Body.

Under WTO rules the creation of a panel can be blocked only once, so China will have another opportunity to create the panel at the next meeting of the body on Jan. 20.

The case is the second launched by China. In September last year it challenged U.S. measures against imports of coated sheet paper, a case which China said Washington resolved in China's favour without it going to a panel.

China is objecting to duties imposed by Washington to counter what it sees as unfairly priced imports. According to U.S. authorities, the goods were sold in the U.S. market for less than they cost at home and benefited from subsidies.

China said in a statement to the dispute body that the way Washington had reached this determination was incompatible with WTO rules, and the United States was now making further investigations of Chinese imports in the same way.

"In these subsequent investigations, the U.S. authorities appear to have followed the same arbitrary and discriminatory approach in the four measures at issue," China said.

"Should such a protectionist approach not be corrected in a timely fashion, there would be escalating harm to various Chinese industries, but also to U.S. consumers," it said.

But the U.S. said they had found that the Chinese goods were "dumped" -- sold for less than in China -- in the U.S. market and benefited from subsidies, hurting U.S. industry.

"China's complaint appears to be an effort to hinder the effectiveness of the two remedies permitted under the WTO agreements for these two injurious practices," it said.

As the world's second biggest exporter, China is usually the target of trade disputes, and has been challenged by the United States on a range of issues, from tariffs on car parts to intellectual property rights.

On Friday the United States launched a new case against China to halt subsidies that boost the sale of Chinese-branded goods around the world.

Reuters
Last Mod: 22 Aralık 2008, 19:29
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