【The Australian】China launches WTO action to keep US, EU markets open

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China launches WTO action to keep US, EU markets open      
http://www.theaustralian.news.com.au/business/story/0,28124,25866363-36375,00.html              

John W Miller| August 01, 2009               

Article from: The Wall Street Journal                                                

CHINAlaunched formal complaints at the World Trade Organisation in a bid totake down trade barriers set up by the European Union and US, a signBeijing is fighting more aggressively to keep foreign markets open forits exports.

The targets of its two complaints are high EUimport tariffs on Chinese screws and a US ban on the import of Chinesepoultry. Beijing had already announced the suit against the US.

Chinainsists it is countering protectionism and fears about job losses athome in a slumbering global economy. Brussels and Washington say thesanctions are justified by lax business and health rules in China. TheEU and the US, the two biggest buyers of Chinese goods, combined for$US610 billion ($731 billion) of imports from China last year.

Inboth cases, the WTO could dismiss the complaints or give China theright to reduce imports by as much as it lost in trade by imposinghigher import tariffs on some EU and US goods by the end of 2010.

Thetwo suits are signs of China's coming-of-age in global trade politics,say trade experts. When China joined the WTO in 2001, its exports tookoff so fast that minor impediments to trade weren't even noticed.

"Ittook them a few years to care about and understand the process," saysSimon Lester, chief administrator at WorldTradeLaw.net, aWashington-based consultancy.

At a multi-lateral trade summitin Geneva in July 2008, China played a leading role for the first time,says Mr Lester. China has recently built a sparkling trade mission downthe street from WTO headquarters in Geneva. It has started spendingmore money on legal advice, say lawyers for major trade-law firms.

OnFriday, Chinese trade officials accused the EU of failing to follow WTOprocedure when it raised tariffs on the import of steel fasteners, thetechnical word for screws and similar parts, earlier this year.

TheEU said Chinese companies were benefiting from tax breaks and bargainraw-material costs, then illegally "dumping," or selling below cost,fasteners on the EU market. Chinese prices were 30 per cent to 50 percent lower, the EU said.

Under WTO law, if domestic companiesare losing substantial sales, countries can fight dumping withincreases in import tariffs. That is what the EU did in January,hitting Chinese fastener imports with duties of 26.5 per cent to 85 percent for the next five years. Sales - almost a billion dollars a year -fell off dramatically.

The suit is the first time China haschallenged a European antidumping duty at the WTO. Brussels has leviedover 140 anti-dumping duties against China since 1979. China filed asimilar complaint against the US last year over paper products.

EUofficials defended the duties. "Anti-dumping measures are not aboutprotectionism, they are about unfair trade," said Lutz Guellner, aspokesman for the European Commission. "The EU's decision to imposemeasures was taken on the basis of clear evidence that unfair dumpingof Chinese products has taken place with state distortion of rawmaterial prices.”

China also petitioned the WTO to launch aninvestigation of a US ban on chicken imports. Beijing had alreadyannounced its intention to launch the suit a month ago. The US hasbanned the import of Chinese poultry products on health grounds since2007.

In its suit, Beijing complained Washington was imposing"naked discriminative measures." US officials say they are stillstudying whether Chinese chicken is safe to eat. China still imports USpoultry, mostly feet and other products.

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