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WTO gives mixed ruling in China-US anti-dumping dispute

US claims WTO victory in China trade dispute
Washington (AFP) Oct 22, 2010 - The United States on Friday claimed victory in a WTO dispute with China over Washington's tariffs on pipes, tubes, tires and sacks. US Trade Representative (USTR) Ron Kirk said the WTO had broadly upheld Washington's right to place duties on goods from China that were "unfairly subsidized." "This is a significant win for American workers and businesses affected by unfairly traded imports," Kirk said in a statement. China had challenged the right to place punitive duties on the lucrative trade in goods used in everything from plumbing to fencing, bringing the case to the WTO in 2008. The United States had introduced tariffs of around 25 percent on Chinese pipes to prevent subsidized goods being dumped on the US market. The Geneva-based World Trade Organization, while broadly upholding Washington's right to impose duties, called on the US authorities to change how some of the duties are calculated.

The WTO's dispute settlement body found that the "US Department of Commerce had acted inconsistently" with trade rules in five areas and rejected China's contentions on at least 12 points. The ruling had been delayed for nearly a year beyond the standard deadline as the dispute settlement panel of independent legal and trade experts grappled with the "substantive complexity" of the case, according to the Geneva-based trade body. Despite the caveats of the ruling, President Barack Obama's administration welcomed the panel's conclusions. "This case makes clear that the Obama administration, including USTR and our colleagues at the Department of Commerce, will vigorously defend the application of our trade remedy laws." It is just one in a series of trade disputes between the two economic superpowers. They have also clashed over duties on auto parts, coated paper, green technology, steel, chicken and most recently China's currency policies, which the US claims constitute an unfair export subsidy. China has the right to appeal the WTO panel ruling.
by Staff Writers
Geneva (AFP) Oct 22, 2010
The World Trade Organisation on Friday partly rejected a Chinese complaint against the United States in a mixed ruling over US anti-dumping measures on some steel pipes, tyres and laminated woven sacks.

Although the WTO's dispute settlement body found that the "US Department of Commerce had acted inconsistently" with WTO rules on five elements of the case, it rejected China's contentions on at least 12 points, according to the ruling.

It called on the United States "to bring its measures into conformity with its obligations" on the contentious items, in the latest of series of bruising disputes between the world's biggest trading powers.

Both sides have 60 days to lodge an appeal against the highly technical ruling with the WTO.

The decision had been delayed for nearly a year beyond the standard deadline as the dispute settlement panel of independent legal and trade experts grappled with the "substantive complexity" of the case, according to the trade body.

When Beijing formally lodged the complaint in September 2008, it had opposed the "unfair practices" that the United States applied during the investigations into the Chinese imports that led to the extra duties in 2007.

Nonetheless, the United States on Friday claimed victory in the dispute on on the lucrative trade in materials used in everything from plumbing to fencing and cheap car tyres.

US Trade Representative (USTR) Ron Kirk said the WTO had upheld the nation's right to place duties on those goods from China, which were "unfairly subsidized."

"This is a significant win for American workers and businesses affected by unfairly traded imports," he said in a statement.

China's huge trade growth has led to an accumulation of disputes between the two sides at the Geneva-based global trade body, notably Chinese shoes and certain raw materials.

China has lodged seven complaints with the WTO since 2002, five of them in disputes with the United States, while it had been targeted in 20 cases brought by trading nations with the boom in cheap Chinese exports in recent years.

Washington and Beijing have also clashed over duties on auto parts, coated paper and most recently outside the WTO on China's currency policies, which the US claims constitute an unfair export subsidy.

Dumping occurs when exports are sold abroad at below their cost on their home market.

The 153 WTO member states have a right to levy extra duty specifically targeting the excessively cheap imports under a complex set of rules, although the anti-dumping measures may subsequently be challenged by the exporting nation.

earlier related report
China's voracious commodities appetite moves markets
London (AFP) Oct 24, 2010 - China, the world's second largest economy and its number one energy consumer, is shaking up global commodities markets where its potent growth momentum is also powering a rise in metals prices.

"China is now the largest energy consumer by our definition," Nobuo Tanaka, head of the International Energy Agency, said recently.

"Probably half of the oil demand increase comes from China. China's consumption is growing, growing, but we don't know how long China will continue to grow."

China, which relies on coal to meet 70 percent of its energy needs, is nonetheless the world's second largest oil consumer behind the United States.

"The center of gravity (in the energy market) is shifting from the Middle East to Asia," Mikkal Herberg of the National Bureau of Asian Research told a conference here earlier this month.

China has stepped up an investment drive to assure itself of a steady supply of oil from Iraq to Latin America where the leading Chinese refiner Sinopec in early October acquired a 40 percent stake in the Brazilian branch of Spanish energy company Repsol.

"There is in China a big supply concern of ensuring what they need -- energy and food but also metals," noted Philippa Malmgren of the Canonbury Group.

Given the depth of its demand, China is fuelling a rise in base metals prices that according to some analysts could be maintained for the next several years. Copper prices recently rose to the levels that prevailed before the 2008 financial crisis while prices for tin hit record highs.

Analysts have said small increases in the supply of metals would likely prove to be insufficient to meet rising demand from emerging markets.

Malmgren said China was now engaged in the construction of new airports, railways and new cities, activities that are "very metal intensive."

"We have structural demand there which is not going to decrease."

Daniel Brebner of Deutsche Bank predicted that China's copper requirements "could double over the next decade."

But other economists urge caution, citing China's dependence on western economies and the determination of Chinese authorities to avert economic overheating.

"Although China is now the single most important consumer of industrial metals, ... the next three places are typically filled by the United States, Japan and Germany," said John Higgins of Capital Economics.

"These developed economies face a long period of sluggish growth. Nor is China immune to what happens in the West, especially if the United States lurches toward protectionism. And there are plenty of downside risks to China itself.

"At the very least, economic growth is likely to be slower and less commodity intenseive over the next several years."

China on Thursday said its economy grew at a slower but still robust pace in the third quarter, which according to analysts showed that efforts to steer the country toward more sustainable growth were working.

Gross domestic product expanded 9.6 percent year-on-year in the third quarter, beating forecasts for 9.5 percent growth, according to the National Bureau of Statistics (NBS) data.

The figure marked a decline from 10.3 percent growth in the second quarter and 11.9 percent in the first three months as Beijing started to withdraw stimulus measures introduced to combat the global crisis.

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