Auto parts import probe blocked
(China Daily)
Updated: 2006-09-30 06:19

GENEVA: China on Thursday blocked a request by the United States, the European Union and Canada to set up a World Trade Organization (WTO) panel to probe its rules on auto part imports.

At a meeting of the WTO's Dispute Settlement Body, US, EU and Canadian representatives formally requested a panel of experts investigate China's rules on auto part imports, which they say hinder foreign auto makers and car parts suppliers in China.

But China reiterated that its regulations were meant to keep "criminal elements" from exploiting the difference between tariff rates for entire automobiles and auto parts and to protect consumers' interests, adding that they were in line with WTO rules.

Any WTO member, including China, has the right to reject a first panel request. But a panel will be established if there is a second request, which could be made at the next Dispute Settlement Body meeting in October.

China considers car parts as a whole vehicle if they account for 60 per cent or more of the value of a final vehicle and it charges a higher tariff on them. But the United States, the European Union and Canada complain that the rule helps Chinese car parts makers and breaks WTO rules.

Earlier this year the three took the rare step of joining forces to call on China to discus changing the rule.

Trade officials of the three trading partners said they had tried to negotiate with China on a solution but found the nation's stance left them with no choice but to proceed with a WTO case the first litigation against China at the trade body, which it joined in 2001.

Even if a WTO panel is established, the investigation could last months or even years before a final judgment is made on China's auto import rules.