WTO: 2011 NEWS ITEMS
5 October 2011
WTO adopts reports on China/US tyres case
At its meeting on 5 October 2011, the Dispute Settlement Body adopted the Panel and Appellate Body reports which examined US measures restricting imports of tyres from China.
DS399: United States — Measures affecting Imports of certain passenger vehicle and light truck tyres from china
The US said that the Appellate Body affirmed all of the Panel’s analysis and conclusion and that it was obviously pleased with this confirmation. The US said that the evidence demonstrating a surge in Chinese tyre imports was overwhelming. The US added that over the period of investigation imports of tyres from China grew by 215%, increasing from some 14 million tyres in 2004 to almost 46 million tyres in 2008. According to the US, they more than tripled their share of the US market, growing from 4.7% in 2004 to 16.7% in 2008. The US stated that the evidence also demonstrated a clear coincidence in trends between the rapidly increasing imports and their effects on the domestic industry. The US added that it had a clear basis to impose the safeguard measure to protect US workers and businesses. The US said that it was the first time under the WTO that any kind of safeguard measure has been completely upheld. The US said that one would have to reach back to 1951 for the last such occurrence under the GATT system. The US expressed concerns about the delay in the circulation of the Appellate Body report without the agreement of the parties. The US added that members were well aware of the Appellate Body workload and had been cooperating in the scheduling of appeals.
China said that the US and the global economy took a nose dive in late 2008. China stated that the economic crisis adversely affected countries worldwide including the US where this round of financial crisis originated. According to China, it also impacted adversely upon the industries worldwide, including the US tyres industry. China said that the safeguard investigation initiated in April 2009 by the US against tyres from China was not requested or supported by the American tyres industry. According to China, US producers stated that they were not injured by Chinese imports. China was puzzled that the US expected to rescue its industry out of the economic crisis by imposing punitive duties on Chinese tyres through safeguard measures which damaged China’s legitimate trading interests and did not help to reduce the US imports of tyres. China said that the declined imports from China were simply replaced by imports from other countries. China added that imports of Chinese tyres declined by 23.6% in 2010 compared to 2009 and further declined by 6% in the first half of 2011. According to China, during the same period, the US total imports of tyres increased by 20.2% in 2010 compared to 2009 and further increased by 9% in the first half of 2011. China said that the US measures merely distorted international trade. China was disappointed that the Panel and Appellate Body upheld the US safeguard measures. China added that the WTO was an international organization that was dedicated to improving global free trade, resisting trade protectionism and eliminating discriminatory treatment in international trade relations. China said that under the current uncertainties and difficulties of the global economy, it was afraid that the Panel and Appellate Body findings, which upheld trade protectionist measures, were probably conveying wrong signals to members. China urged the US to discard the measures promptly and to maintain a market of fair competition for Chinese enterprises.
The EU welcomed the findings of the Panel and Appellate Body reports. According to the EU, the reports confirmed that the standards for triggering the application of the transitional product-specific safeguard mechanism (TPSSM) were laxer than the general safeguard’s standards. The EU said that the TPSSM was part of the carefully negotiated accession of China and that it was available to other WTO members until the 12th anniversary of China’s accession to the WTO.
Japan, Australia, Chile, Argentina, Costa Rica and Guatemala expressed similar concerns as the US regarding the delay in the circulation of the Appellate Body report.
The next meeting of the DSB will be held on 25 October 2011.
>>Proposed items for consideration at the DSB: http://www.wto.org/english/news_e/news11_e/dsb_agenda_05oct11_e.htm