China seeks US$2.4 billion in penalties against USA at WTO

Marco Green
October 22, 2019

WTO appeals judges said in July that the United States did not fully comply with a WTO ruling and could face Chinese sanctions if it does not remove certain tariffs that break the watchdog's rules.

In a statement circulated to WTO members last week, but sent to journalists on Monday, China claimed the penalty was justified given the "United States continued non-compliance" with previous WTO rulings.

The WTO's dispute body effectively gave Beijing a green light to seek compensatory sanctions in mid-August.

In March 2018, WTO judges found the U.S. had failed to comply with earlier rulings and that Washington was still applying illegal duties.

USA officials argue China benefits from easier treatment at the WTO, while subsidizing manufactured goods and dumping them on world markets. USA officials in Washington and Geneva had no further comment.

The United States and China have imposed a series of tit-for-tat tariffs over the past 15 months that have roiled financial markets and resulted in a sharp drag on global economic growth.

The United States had failed to comply with the DSB recommendations and rulings within the specified period and no agreement on compensation had been reached, it said. China had taken the court in 2012 over American anti-subsidy tariffs on Chinese goods such as solar panels and wind towers.

China's request appears on the agenda of the DSB set for October 28.

Washington has challenged the validity of the WTO ruling and could dispute the $2.4 billion in retaliatory sanctions, sending the matter to arbitration.

China will ask the World Trade Organisation for permission to impose tariffs on United States dollars 2.4 billion worth of U.S. goods as compensation in a dispute that dates back to 2012, documents showed Monday.

Washington criticized that decision, which it said recognizes that China uses state-owned enterprises to subsidize and distort its economy but contends the USA must use "distorted Chinese prices" to measure subsidies.

The U.S. has had a fraught relationship with the WTO under the Trump administration.

An outgrowth of General Agreement on Tariffs and Trade, known as GATT, the WTO was founded in 1995 to supervise trade agreements.

US Trade Representative Robert Lighthizer told reporters the administration still aimed to finalise a deal on the first phase of the deal in time for the Asia-Pacific Economic Cooperation meetings in Chile on November 16 and 17, but said there were still outstanding issues to resolve.

But Secretary of Commerce Wilbur Ross sought to temper expectations that a deal would be completed next month, telling the Fox Business Network that timing was less important than making "the right deal".

Other reports by Click Lancashire

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