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China, US resolve chip dispute
Updated: 2004-07-09 08:00

The United States and China have resolved a dispute over Chinese market access for U.S. semiconductors, which led the United States to lodge the first World Trade Organization complaint against Beijing, the U.S. government said Thursday.

A statement from the U.S. Trade Representative said the deal "will ensure full market access ... for U.S. integrated circuits in China," which is a market worth more than $2 billion to the U.S. industry.

The Bush administration filed the complaint March 18, arguing a 17 percent value-added tax on integrated circuits constituted an unfair trade barrier.

The full force of the deal will take effect by April 1, 2005, when China stops providing tax refunds to domestic producers currently getting the rebate, USTR said.

March's complaint was the first filed against China since the country joined the WTO in December 2001.

In April, China and the United States sorted out another semiconductor-related trade dispute, which related to a proprietary security technology that China had planned to impose on wireless networking chips.

That dispute was resolved only after the U.S. Trade Representative Robert Zoellick met directly with China Vice Premier Wu Yi.

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