China To Challenge US At WTO

After recently attacking measures utilized in the United States to assist its renewable energy sector, the Chinese Ministry of Commerce (MOC) has now also formally challenged US countervailing duties over 22 other categories of Chinese products, accusing it of abusing World Trade Organization (WTO) rules.

Earlier this month, the US Department of Commerce announced a preliminary determination to impose antidumping duties (ADs), ranging from 31.14% to 249.96%, on imports of solar cells from China. It alleges that Chinese manufacturers are illegally dumping solar cells and panels in the US market after receiving official subsidies, but the Chinese government has said that the ruling highlighted a tendency towards trade protectionism within the US.

Almost immediately thereafter, the MOC announced that, following investigations begun in November last year after an application from the applicable sections of both the Chinese Chamber of Commerce and Federation of Industry, it has concluded that certain measures employed by the US to assist its renewable energy sector constitute unfair subsidies.

The MOC has found that six policies to assist the wind, solar and hydroelectric energy programmes in various US states contravened the WTO agreement on subsidies and countervailing measures, and constituted barriers to trade. However, there is, as yet, no indication of what future action China could take against those contraventions.

In addition, the MOC, through a subsequent statement from its spokesman Shen Danyang, has reignited the on-going dispute over the application of countervailing duties (CVDs) by the US over 22 categories of its products. China has requested formal WTO consultations over almost USD7.29bn of its annual exports into the US market.

In March 2011, the WTO Appellate Body had already found that the imposition by the US of double remedies, that is, the offsetting of the same subsidization twice by the concurrent imposition of ADs and CVDs, was inconsistent with its WTO obligations.

However, according to Shen’s statement and despite the passing by the US Congress in March this year of a bill to try and legitimize its stance, the US has still not resolved the double-duty issue. China has expressed concern over the injury caused to its industries, and said that the US has continued to act in a manner inconsistent with WTO rules. It has reserved the right to take further measures under WTO dispute settlement mechanisms.

May 29, 2012

Source: Tax News