I thought it proper to take stock of where we are in terms of trade frictions between the US and China after US legislators finally decided to stick it to the PRC. This news has dominated the airwaves for two days straight, but unbeknownst to many, China has actually won a ruling lately at the WTO Dispute Settlement Mechanism (DSM) concerning US limitations placed on chicken parts coming from China. This poultry brouhaha stems from US non-removal of import restrictions after the bird flu scare came and went. These restrictions are still in effect today. So, about this same time last year, China took the US to the WTO. Our favourite official publication, China Daily, has a neat summary:
The World Trade Organization (WTO) issued a report of the panel on Wednesday, supporting China over its complaint against measures taken by the United States which have affected imports of poultry from China. The panel ruled that Section 727, the Omnibus Appropriations Act of 2009, applied by the US had effectively prohibited the lifting of the ban on poultry imports from China, and inconsistent with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement).So chalk one up for China. For trade completists, you can also visit the WTO site for further details about the ruling. Let me also take this opportunity to commend China Daily for writing such a detailed yet easily understood summary of this dispute. Chinese state media is improving all the time and their command of English is becoming impeccable. Meanwhile, Reuters offers a comprehensive summary of the myriad of other trade disputes between these two countries (I've omitted the two above for brevity's sake)...
The panel concluded that the United States trade regime has not acting in accord with the specified provisions of the SPS Agreement and the GATT 1994, and has "nullified or impaired benefits accruing to China under those agreements." In 2004, China and the United States stopped importing poultry products from each other for fear of the bird flu. China had called off the ban on poultry import from the United States when the situation was relieved.
Access of Chinese poultry to the US market is still blocked, because of the application of Section 727 passed by the US congress, which restricted the United States Department of Agriculture (USDA) and its agency, the Food Safety and Inspection Service (FSIS) from using funds allocated by the US Congress to create a rule to lift the poultry ban on China. At the request of China, a panel was established by the WTO on 23 September 2009 to investigate the case.
SPECIALTY STEELCurrency, steel, credit cards, steel pipes, copper pipes, coated paper, tires, rare earth elements, poultry...the list goes on and on. And we're far from done.
The United States filed a case with the World Trade Organization to challenge anti-dumping and countervailing duties China placed on a U.S. specialty steel product called grain-oriented flat-rolled electrical steel. U.S. Trade Representative Ron Kirk accused China of imposing these duties to "harass U.S. exports."
CREDIT CARDS
The United States accused China of creating a monopoly in its electronic payments market, allowing China Union Pay to handle most credit and debit card transactions made by Chinese consumers. In an attempt to open up access for U.S. credit and debit card companies, the United States filed a complaint with the WTO.
COATED PAPER
The United States set combined duties ranging up to 313.8 percent on coated paper from China. The duties come after accusations were made that Chinese paper companies were receiving government subsidies and selling their goods to the United States at unfairly low prices. The paper is used in the printing of corporate annual reports, high-end catalogs and magazines, and in other prestigious applications.
SEAMLESS STEEL PIPE
The United States imposed anti-dumping duties ranging from 48.99 percent to 98.74 percent on seamless steel pipe from China. It also slapped countervailing duties of 13.66 percent to 53.65 percent on the pipe. The U.S. Commerce Department levied the steep duties to offset below-market pricing by Chinese exporters and Chinese government subsidies. The Chinese Ministry of Commerce called preliminary anti-dumping duties set in November 2009 protectionist and launched its own investigation into imports of U.S.-made automobiles.
TIRES
China has taken its case over U.S. tire duties to the WTO, arguing that the 35 percent additional duty imposed is unjustified protectionism. The Obama administration imposed safeguard duties on Chinese-made tires in September after a complaint by unions that low-priced Chinese imports were forcing U.S. factories to close.
RAW MATERIALS
The European Union and the United States are arguing to the WTO that Chinese export restrictions, including taxes and quotas, on several raw materials unfairly raise international prices, while keeping input costs lower for manufacturers in China. [No case yet, but review the goings-on over rare earth elements.]
COPPER PIPES
The United States has set final duties ranging up to 61 percent on hundreds of millions of dollars of copper pipe and tube from China. The U.S. International Trade Commission will vote in November on whether to uphold the duties or strike them down.
DISTRIBUTION SERVICES AND INTELLECTUAL PROPERTY RIGHTS
In December 2009, China lost an appeal against a WTO ruling that its curbs on importing and distributing foreign publications and audiovisual products violated its WTO commitments. The case was initially brought by the United States. Beijing accepted the ruling in July and U.S. industry groups are closely watching how it complies.