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US moves WTO against China over auto duties

July 06, 2012 11:12 IST

The United States has filed a complaint against China at the World Trade Organisation over the nearly $3 billion of antidumping and countervailing duties that Beijing levies on US automobile exports, saying that such duties abuse trade laws.

US Trade Representative Ron Kirk said America has requested dispute settlement consultations with China at the WTO in an attempt to eliminate these "unfair duties".

This is the third time that the Obama administration has challenged China's "misuse" of trade remedies.

"As we have made clear, the Obama Administration will continue to fight to ensure that China does not misuse its trade laws and violate its international trade commitments to block exports of American-made products," Kirk said in a statement.

"American auto workers and manufacturers deserve a level playing field and we are taking every step necessary to stand up for them," he added.

President Barack Obama referred to the move against China at a campaign event in Ohio, saying that his administration has taken action to hold China "accountable for unfair trade practices that harm American automakers.

"Americans are not afraid to compete. We believe in competition. I believe in trade. Americans and American workers build better products than anybody else so as long as we're competing on a fair playing field instead of an unfair playing field, we'll do just fine.

"But we're going to make sure that competition is fair," Obama added. The US said China's duties on imports of American-made vehicles appear to be inconsistent with WTO rules. It contends that China must play by the rules to which it agreed when it joined the WTO, including maintaining open markets on a non- discriminatory basis, and following internationally-agreed procedures in a transparent way.

In December 2011, China began imposing antidumping and countervailing duties on imports of American-produced automobiles.

The antidumping duties range from two per cent to 8.9 per cent, while the countervailing duties range from 6.2 per cent to 12.9 per cent.

The specific products affected by the duties are American-produced cars and SUVs with an engine capacity of 2.5 liters or larger.

Last year, the US exported more than $3 billion of these automobiles to China. In two earlier WTO cases, the US challenged duties that China had imposed to restrict imports of certain steel products and chicken products from the US.

The Obama administration also brought actions against China's export restraints on several industrial raw materials, including rare earths, China's restrictions on electronic payment services and subsidies to China's wind power equipment sector.

Yoshita Singh in New York
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