WTO to review China bid for trade sanctions on US

A Beijing representative said measures taken by Washington had "seriously infringed China's legitimate economic and trade interests".
A Beijing representative said measures taken by Washington had "seriously infringed China's legitimate economic and trade interests".PHOTO: AFP

Beijing filed dispute in 2013, taking issue with way Washington assesses 'dumping'

GENEVA • A World Trade Organisation arbitrator was yesterday set to review a Chinese request to impose more than US$7 billion (S$9.6 billion) in annual sanctions on the US over anti-dumping practices, a Geneva trade official said.

The decision to appoint an arbitrator was reached during a special meeting of the WTO's Dispute Settlement Body (DSB) convened to discuss developments in a five-year-old trade dispute between the world's top two economies.

Beijing had already warned earlier this month that it planned to ask the global trade body during the meeting for permission to impose US$7.04 billion in annual trade sanctions on Washington in the case.

Beijing's representative told yesterday's meeting that measures taken by Washington had "seriously infringed China's legitimate economic and trade interests".

A source close to the WTO, meanwhile, said the arbitration "was automatically triggered after the United States informed the WTO that it objected to the level of retaliation proposed by China".

WTO arbitration can often be a drawn-out process, and the results are not expected to be known for months.

China initially filed its dispute against the US back in December 2013, taking issue with the way Washington assesses whether exports have been "dumped" at unfairly low prices in the US market.

The use of anti-dumping duties is permitted under international trade rules as long as they adhere to strict conditions, and disputes over their use are often brought before the DSB.

In this specific case, China alleged that the US, in violation of WTO rules, was continuing a practice known as "zeroing", which calculates the price of imports compared to the normal value in the US to determine predatory pricing.

In October 2016, a panel of WTO experts found largely in China's favour in the case, including on the issue of "zeroing".

The US, which has repeatedly lost cases before the WTO over its calculation method, said in June last year it would implement the panel's recommendations within a "reasonable" timeframe.

This past January, the DSB set an Aug 22 deadline for Washington to bring its practices in line with the 2016 ruling. According to WTO rules, the plaintiff in such cases can request permission to impose sanctions if the parties have not reached an agreement on a satisfactory compensation within 20 days of the WTO deadline.

Meanwhile, the US' trading partners are expected to demand more details at the WTO next week about Washington's plans for a US$12 billion aid package for American farmers hurt by the Trump administration's tariff wars.

The US aid package, announced in July, is intended to shield American farmers from the repercussions of trade disputes between the US and China, the European Union and others.

But other WTO members want more clarity on how long it will last and whether it adheres to WTO rules, as it could have an impact on their own agriculture sectors and competition.

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on September 22, 2018, with the headline 'WTO to review China bid for trade sanctions on US'. Print Edition | Subscribe