WTO rules against US ‘dou­ble rem­edy’

China Daily (Canada) - - BUSINESS - By LI JIABAO li­ji­abao@chi­nadaily.com.cn

The World Trade Or­ga­ni­za­tion on Thurs­day re­leased the re­port of a panel that backed China’s chal­lenge of coun­ter­vail­ing and anti-dump­ing mea­sures taken by the United States against cer­tain prod­ucts from China.

How­ever, the WTO didn’t sup­port China’s claim that a US mea­sure known as the GPX Act was in­con­sis­tent with WTOrules.

More than 20 types of Chi­nese ex­ports, rang­ing from pho­to­voltaic cells for the so­lar in­dus­try to pipes used in wells in the oil and nat­u­ral gas in­dus­tries, were in­volved in the in­ves­ti­ga­tions or re­views launched by the US be­tween Nov 20, 2006, and March 13, 2012.

“China wel­comes theWTO’s sup­port of our claims. We urge the US to cor­rect its mis­use of trade rem­edy mea­sures and guar­an­tee a level play­ing field for Chi­nese en­ter­prises,” said Shen Danyang, spokesman of theMin­istry of Com­merce.

He said China re­gret­ted that the in­ter­na­tional trade body found the GPX Act did not breach theWTOrules.

The act, an amend­ment to a 1930 trade law, au­tho­rizes the Com­merce Depart­ment to ini­ti­ate coun­ter­vail­ing mea­sures on non­mar­ket econ­omy coun­tries and retroac­tively rat­ify the le­git­i­macy of pre­vi­ous probes.

“The rul­ing is a great vic­tory for us in chal­leng­ing the US mis­use of trade rem­edy mea­sures, even though theWTOrul­ing didn’t fully sup­port our claims. TheUS has to cor­rect its un­fair du­ties on Chi­nese ex­ports,” said Yang Guo­hua, deputy di­rec­tor-gen­eral of the de­part­mentof treatiesand­laws at theMin­istry of Com­merce.

Chi­nese ex­ports of more than $7.2 bil­lion could ul­ti­mately be af­fected, ac­cord­ing to the Min­istry of Com­merce in Bei­jing.

The panel re­port agreed with China on the US’ fail­ure to iden­tify and avoid the dou­ble reme­dies in the in­ves­ti­ga­tions or re­views, and it found the US ac­tions were in­con­sis­tent with­WTO rules.

Dou­ble reme­dies arise when both anti-dump­ing and coun­ter­vail­ing du­ties are be­ing ap­plied on a prod­uct, if the sub­si­dies be­ing tar­geted by the lat­ter du­ties are also re­spon­si­ble in part for the dump­ing.

The re­port re­jected China’s claim re­gard­ing the GPX Act and held that act did not en­hance the du­ties or added im­port bur­dens.

Zuo Haicong, dean of the Law School of Nankai Univer­sity in Tian­jin, said that the fa­vor­able part of the rul­ing­had been ex­pected be­cause of a sim­i­lar rul­ing in­March 2011.

The WTO’s Ap­pel­late Body ul­ti­mately backed China three years ago, say­ing that the US could not si­mul­ta­ne­ously im­pose both coun­ter­vail­ing du­ties and anti-dump­ing du­ties with­out hav­ing as­sessed whether the ex­tra du­ties amounted to dou­ble reme­dies.

“The win is sig­nif­i­cant be­cause the WTO clearly said ‘no’ to the US mea­sure in­volv­ing dou­ble reme­dies, which could in­crease the du­ties on Chi­nese ex­ports,” Zuo said.

“The GPX Act is un­rea­son­able. But it’s hard for the WTO to in­val­i­date a US do­mes­tic law and it thus reached a com­pro­mise that the act didn’t bur­den other economies,” he added.

Both sides have 60 days to ap­peal af­ter the dis­tri­bu­tion of the re­port, un­der­WTOrules.

On Sept 17, 2012, China re­quested con­sul­ta­tions with the US con­cern­ing the coun­ter­vail­ing and anti-dump­ing mea­sures in­volved in the new rul­ing.

At a meet­ing on Dec 17, 2012, the WTO Dis­pute Set­tle­ment Body es­tab­lished a panel to look into the case.

“The US may not ap­peal be­cause there’s lit­tle hope of chang­ing the panel’s rul­ing. Also, China will prob­a­bly not ap­peal. It’s not easy to chal­lengeUS do­mes­tic laws and, in the fu­ture, China will fo­cus more on the im­ple­men­ta­tion of the laws and en­sure that US moves are con­sis­tent with the WTOrules,” Zuo said.

The world’s top two economies have been caught up in fre­quent trade dis­putes re­cently. The WTO on Wed­nes­day ruled against China on ex­port re­stric­tions on rare earths fol­low­ing com­plaints from the US, the Euro­pean Union and Ja­pan.

US Trade Rep­re­sen­ta­tive Michael Fro­man wel­comed the WTO’s rul­ing, which “means Amer­i­can com­pa­nies and work­ers through­out our man­u­fac­tur­ing econ­omy will be able to com­pete fairly”.

On Wed­nes­day, ReneSola Ltd, a leading brand and tech­nol­ogy provider of so­lar pho­to­voltaic prod­ucts in Zhe­jiang prov­ince, said that it has been selected as one of the re­spon­dents in theUS Depart­ment of Com­merce’s anti-dump­ing in­ves­ti­ga­tion on cer­tain crys­talline sil­i­con pho­to­voltaic prod­ucts from China.

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