China deplores WTO's auto parts probe decision
Updated: 2006-10-27 15:13
WTO panel to probe China's auto parts
China defended its import duties on auto parts on
Friday, deploring the World Trade Organization's decision to launch a panel to
hear US and European complaints that the duties are unfair protection.
The WTO announced on Thursday that a panel would examine claims that
China is improperly shielding its $19 billion auto parts market through a 25
percent tariff on components for cars, trucks and other vehicles.
A man stands in a car dealership in
Shanghai in this March 10, 2006 file photo. The WTO decided on Thursday to
set up a panel to investigate into the complaints of the US and EU on
China's import duties on auto parts. [Reuters]
reaction from China's Ministry of Commerce was swift and unyielding, suggesting
that Beijing is not courting compromise in the high-profile dispute.
"The relevant rules are in keeping with commitments
China made on joining the WTO," spokesman Chong Quan said in a statement on the
ministry Web site (www.mofcom.gov.cn).
"We have shown
the utmost sincerity in seeking to resolve the issue through negotiation. So it
is extremely regrettable for the EU, US and Canada to again demand setting up
Once its three members are appointed, the
panel will have six months to report its findings. But either side can appeal,
meaning a final ruling could come as late as 2008.
Washington, Brussels and
Ottawa first asked for a panel to consider their complaint last month but China
exercised its right to block the first request. The second request entered on
Thursday automatically triggered creation of the panel.
car parts as a whole vehicle if they account for 60 percent or more of the value
of a final vehicle and it charges a higher tariff on them.
China's rules on auto parts were to prevent customs duties evasion and "protect
the rights and interests of consumers".
China's average import duties on
whole vehicles had fallen from 80 percent before it joined WTO to 25 percent,
and duties on auto parts have fallen from 30 to 10 percent, Chong said.
"In market access, (China) has given other WTO members unprecedentedly
open opportunities," he added.
Car makers from both sides of the
Atlantic have invested heavily in China to set up joint ventures to make
Australia, Japan, Mexico and Argentina all signed up as
interested third parties in the auto parts panel, and other countries have 10
days to register.
Until now, China has only been involved in WTO
disputes as an observer or complainant. In 2002, it joined a case launched by
several trading powers against the United States over tariffs Washington imposed
on steel parts.
The United States started a WTO case against Beijing in
2004 over duties on semi-conductors, but dropped it before the panel stage when
the two countries negotiated a settlement.