Update on U.S. – China Litigation in the WTO — What’s the Verdict?


Two instructive quotes concerning the WTO dispute resolution system and the role of China in observing the rules of global trade can be found in the Financial Times earlier this year.
“[The WTO is] the greatest advance in multilateralism …. It provides enhanced rule-based global economic trading system … Its dispute resolution mechanism has proved robust and effective …  [It has] many characteristics of a global legal system….. [I]n the highly sensitive area of trade a quasi-judicial system of adjudication … is [the] objective.” Sutherland, “The World Will Regret its Neglect of Doha.” Financial Times (Jan. 28, 2011).
“China wants to forge a new phase of globalisation where many of the roads – financial, commercial and perhaps eventually political. China is not seeking a rupture with the international economic system (although some foreign companies are fearful of a technology grab). But it is looking to mould more of the rules, institutions and economic relationships that are at the core of the global economy. It is trying to forge post-American globalisation.” “A Strategy to Reshape the Planet,” Financial Times (Jan. 18, 2011).
Here is an update of recent litigation between the United States and China in the WTO (2010-2011). I leave it to you to assess the role of China  in observing global trade rules.
… A WTO panel ruled that the United States violated its WTO obligations toward China in the poultry case filed by China contesting USDA restrictions on processing imports from China. However, in an unusual decision the panel did not make any recommendations since the relevant statutory provision expired. “U.S.-China Poultry Dispute.” WTO News (September 29, 2010).
… The Obama administration accepted the Section 301 labor (steel) filing and to investigate the clean energy polices of China as unfair trade practices involving, in part, quotas and taxes on export of rare earth metals. “U.S. Launches §301 Investigation into Trade & Investment Policies in Green Technologies.”  USTR Announcement (10.15.10).
…The USTR announced that the United States requested the World Trade Organization to establish dispute settlement panels in two cases against China. One case addresses China’s imposition of antidumping duties and countervailing duties on imports of grain-oriented flat-rolled electrical steel from the United States. The other case challenges China’s discriminatory and restrictive treatment of U.S. suppliers of electronic payment services.USTR Requests Two New WTO Dispute Settlement Panels Against China.” USTR News (Feb. 11, 2011).
… A WTO panel has ruled generally in favor of China in its antidumping complaint against the EU concerning steel fastners. This is China’s biggest win in the WTO / DSU. China complained that the EU’s calculation of antidumping duties by use of constructive costs because it was a nonmarket economy wasn’t valid. Panel Report on China – EU Iron & Steel Fastners from China. (WTO Panel) (December 3, 2010).
… China has filed a new action in the WTO requesting consultations with the U.S. concerning its antidumping measures on shrimp imports from China.China Files Dispute Against the U.S.WTO News (Feb. 28, 2011).
… The Appellate Body reversed much of the panel report which ruled in favor of the U.S. The U.S. had argued that its CVD against China were justified because of Chinese subsidies on export of steel and other products. This decision addressed both “public bodies” and “double remedies.”  (Steel & Certain Products from China) WTO News (March 11, 2011).
… A WTO panel has found in favor of the U.S., the EU and Mexico and against China concerning its export restrictions on various minerals. These restrictions included export quotas, tariffs and minimum export prices. China relied upon environmental arguments but the panel rejected them because there were no corresponding measures to limit domestic industries. WTO News  (July 5, 2011).
… A WTO panel has ruled against the U.S. in using zeroing and on other issues concerning its antidumping duties on shrimp from Vietnam.  WTO News (July 11, 2011).
… The Appellate Body has ruled in favor of the United States against China concerning safeguard charges on tire imports, by upholding the earlier panel report. “U.S. Prevails in WTO Dispute about Chinese Tire Imports.USTR News (September 5, 2011).
… The USTR has filed a new action against China concerning Chinese antidumping duties on import of poultry from the U.S. “New Action in WTO Contesting China’s A / D on Chicken Imports from U.S.USTR News (September 20, 2011).

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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