US claims trade vic­tory over China

The Myanmar Times - - International Business -

PRES­I­DENT Barack Obama’s ad­min­is­tra­tion said it has scored an­other trade vic­tory over China af­ter Bei­jing ended a dis­puted tax pol­icy that favoured Chi­nese-pro­duced air­craft in vi­o­la­tion of global trade rules.

The US Trade Rep­re­sen­ta­tive filed a dis­pute in De­cem­ber with the World Trade Or­gan­i­sa­tion, charg­ing that China’s 17 per­cent value-added tax on smaller air­craft, such as busi­ness jets, dis­crim­i­nated against im­ported air­craft.

China’s de­ci­sion to end the tax ex­emp­tions for air­craft un­der 25 met­ric tonnes ef­fec­tively ends the WTO dis­pute set­tle­ment process, which can take six to nine months.

USTR Michael Fro­man ap­plauded the vic­tory but stressed that the ad­min­is­tra­tion will re­main watch­ful for other prac­tices that im­pede free trade of US prod­ucts in China.

“While we are happy to an­nounce this dis­crim­i­na­tion has ended, we re­main deeply con­cerned about China’s lack of trans­parency on taxes af­fect­ing US prod­ucts,” Mr Fro­man said.

“Trans­parency is a core obli­ga­tion in the in­ter­na­tional trad­ing sys­tem. China should not im­pose dis­crim­i­na­tory taxes or con­ceal them.”

China is one of the fastest-growing avi­a­tion mar­kets in the world. The USTR cited es­ti­mates by Chi­nese reg­u­la­tory agen­cies of an­nual growth of about 19 per­cent a year in general avi­a­tion air­craft through 2020.

The US aerospace sec­tor em­ploys nearly 500,000 peo­ple and is a ma­jor ex­porter, and Wash­ing­ton has long been quick to de­fend it against al­leged un­fair treat­ment.

Trade is a chronic ir­ri­tant be­tween the coun­tries as China’s mas­sive econ­omy depends largely on ex­ports for growth, and the United States is its biggest im­port mar­ket. –

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