WTO finds in favour of China that says US broke trade rules
THE World Trade Organisation Appellate Body (AB) has published a report upholding an earlier WTO decision that certain US Commerce Department countervailing (CV) duties on goods from China broke WTO rules
THE World Trade Organisation Appellate Body (AB) has published a report upholding an earlier WTO decision that certain US Commerce Department countervailing (CV) duties on goods from China broke WTO rules.
Specifically, the AB decision aligned with a March 2018 WTO compliance panel finding that the US Commerce Department failed to explain in several CV proceedings how Chinese government intervention in the market led to domestic prices for certain inputs deviating from a market-determined price and that Commerce failed to take into account price data on the record.
'An investigator's determination of how prices in markets are in fact distorted as a result of government intervention must be based on positive evidence,' states a summary of the AB decision, reported American Shipper.
In the wake of a WTO dispute initiated by China in May 2016 to ascertain whether the US was complying with an earlier WTO ruling regarding US CV duties levied on certain imports, the Commerce Department amended the duty determinations in 12 of 17 relevant CV probes on China.
The AB also upheld a compliance panel finding that evidence used by Commerce in several CV cases wasn't specific enough to prove that China was providing unfair subsidies to industries.
However, the AB report upholds a WTO compliance panel finding that Commerce's determinations of what constitutes a 'public body' align with WTO regulations.
'Today's appellate report recognizes that the United States has proved that China uses state-owned enterprises (SOEs) to subsidize and distort its economy,' the Office of the US Trade Representative said in a statement.
Said the USTR: 'Nonetheless, the majority in the report says that the United States must use distorted Chinese prices to measure subsidies, unless the US provides even more analysis than the hundreds of pages in these investigations. This conclusion ignores the findings of the World Bank, OECD working papers, economic surveys and other objective evidence, all cited by the United States.'