Recent ruling by WTO claims that US methods in deciding when foreign imports are unfairly priced break the Organisation’s rules by imposing heavy duties on Chinese and Indian products.
The World Trade Organisation (WTO) said that the US broke its rules in imposing hefty duties on Chinese products, including steel, solar panels and a range of other goods that Washington claims enjoyed government subsidies.
In a similar case involving US methods in deciding when foreign imports are unfairly priced, another WTO panel ruled in support of some claims by India against tariffs on exports from three of its major firms.
The two cases, both under scrutiny for nearly two years by the separate panels, reflected a widespread concern in the 160-member WTO over what many see as illegal US protection of its own producers.
In the USD 7.2 billion Chinese case, the panel found that Washington had overstepped the mark in justifying the so-called countervailing duties it imposed as a response to alleged subsidies to exporting firms by China’s government.
It informed the US it should adapt its measures to bring them into line with the WTO’s agreement on subsidies and countervailing measures, dubbed the SCM in trade jargon.
The US said it was weighing its options. US Trade Representative Michael Froman said the decision to reject many of China’s challenges was a victory for American businesses and workers. “With respect to the other findings in the panel report, the Administration is carefully evaluating its options, and will take all appropriate steps to ensure that US remedies against unfair subsidies remain strong and effective.” Many other members of the organisation, including the European Union and Japan, declared themselves interested parties in the disputes, although they did not say if their sympathies lay with the US or its challengers.
The ruling in the Indian case – which involves steelmakers such as Tata, Jindal and Essar who are supplied by the state-run iron-ore mining firm, NMDC – said the US had “acted inconsistently” in terms of some provisions of the SCM agreement and had unfairly reduced Indian trade revenue.