China’s commerce minister on Thursday urged the United States to “correct its wrongdoings of abusing trade remedies” after the world’s top trade body recently sided with China in challenging the US trade measures against Chinese products.
“We strongly urge the US to seriously look at its long-lasting and systematic legislations and practices that are inconsistent with world trade rules, and sincerely implement the rulings of the Dispute Settlement Body of the World Trade Organization as well as promptly and comprehensively correct its wrongdoings of abusing trade remedies,” Commerce Minister Gao Hucheng said in a statement on the ministry’s website.
“The US should be an example of strictly following (world trade) rules rather than a bad example of breaking the rules. The US, in particular, shoulders more responsibilities in upholding multilateral trading rules and opposing protectionism when the global economy is under slow recovery,” Gao said.
The US’ misuse of trade remedies “severely harmed the interests of Chinese enterprises and the Chinese government will express grave concerns while never sitting idly by”, the minister said.
“Economic and trade relations are the ballast and propeller of Sino-US ties. The healthy and stable development of ties lies in the joint efforts of both sides and we expect more positive impetus from the US side,” Gao said.
Washington started in 2006 to impose countervailing duties on Chinese products such as solar panels and steel products while holding China as a nonmarket economy. After China launched a series of litigation against the US tariffs, Washington enacted laws, such as the GPX Legislation to explicitly allow the application of countervailing duties to nonmarket economies, to back its moves.
“The rulings of (the WTO) proved that, at least, none of the 26 anti-dumping and countervailing duties imposed by the US before March 2012 were consistent with the WTO rules. In addition, the US domestic legislations related to trade remedies are highly suspect of breaching the WTO rules,” the minister said.
On July 7, the WTO issued a report on the appeal regarding US anti-dumping and countervailing duties on 24 products from China. The WTO panel found that the US breached WTO rules by failing to affirmatively investigate an alleged overlap with respect to 25 countervailing duty proceedings and ruled the US moves “to be inconsistent with” WTO rules. But the WTO was unable to rule on whether the GPX Legislation, a US trade remedy law signed by US President Barack Obama in March 2012, was consistent with WTO rules.
On Monday, the WTO issued a panel report on the US’ imposition of countervailing duties on 22 Chinese exports worth $7.2 billion a year. The WTO backed China on many aspects and found the US measures violate WTO rules. US Trade Representative Michael Froman said on Monday that the administration is “carefully evaluating its options” with respect to the panel report while both sides have a right to appeal within 60 days.
Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics in Beijing, said that the US’ abuse of trade remedies in recent years was mainly driven by “the pressure of enhancing employment” amid slow economic recovery.
“Trade friction between the world’s two largest economies will remain frequent in the near future as the US employment performance far dwarfs its economic recovery ... China needs to urge the US to reduce trade remedies and turn to the WTO platform for fair and competitive trade development. Countermeasures are an option for China but both sides should eye more cooperation as they share huge mutual interests,” Sang said.