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Business

US appeals to WTO over Chinese 'protectionism'

Latest update : 2008-12-21

Washington has submitted a complaint to the World Trade Organisation over government programs aimed at promoting Chinese-branded products that include what the US considers protectionist policies and export subsidies.

AFP - The United States said Friday it had hauled China to the WTO over Beijing's programs to market Chinese-branded goods which Washington charged were based on "protectionist" policy.
  
"We are going to the WTO today because we are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese-branded products at the expense of" American interests, said US Trade Representative Susan Schwab.
  
The US move addresses, among others, two of Beijing's key Chinese brand programs.
  
At the central government level, China has established the "Famous Export Brand" program and the "China World Top Brand" program under which the government set out criteria for an enterprise to receive such designations.
  
Enterprises involved in the programs are entitled to various government preferences, including what Washington said appeared to be financial support tied to exports.
  
The United States, Schwab said, was concerned that the Chinese programs appeared to incorporate export subsidies and "protectionist industrial policy apparently underlying these programs."
  
These programs, she added, appeared designed to promote the development of global Chinese brand names and to increase sales of Chinese-branded merchandise around the world.
  
Washington's decision to seek World Trade Organization (WTO) dispute settlement consultations with China came after analysis of dozens of the promotion programs, Schwab's office said in a statement.
  
Following the request, both parties would have 60 days to resolve the dispute bilaterally.
  
If no resolution is reached, WTO arbitrators would then be asked to make a ruling which could be appealed by either side.
  
"While dialogue is always our preferred option, we have always stated our willingness to use WTO rules and our own laws to ensure that our workers and businesses are not subject to unfair practices," said Commerce Secretary Carlos Gutierrez.
  
"This is one of these instances. We will continue to use all of the tools at our disposal to ensure that China plays by the rules," he said.
  
The Chinese brands covered a wide range of sectors, including household electronic appliances, textiles and apparel, light manufacturing industries, agricultural and food products, metal and chemical products, medicines, and health products.
  
The US request for consultations also addresses several independent sub-central government subsidy programs that appear to benefit Chinese exports regardless of whether they are famous brands.
  
Earlier this week, China lost an appeal against a WTO ruling that its tariffs on car part imports violated global trade rules.
  
The WTO Dispute Settlement Body ruled in July that China's policies were inconsistent with WTO rules, a decision that was welcomed by the United States which brought the complaint along with Canada and the European Union.
  
China appealed against the ruling, but the WTO's appeal body said that it "upheld the panel's" findings.

Date created : 2008-12-19

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