This week two WTO panels decided the first two cases involving China – U.S. litigation in 2014. These were two major cases.
The first case was brought by the United States involving China’s export restriction on rare earths. The second case was brought against the United States involving its 2012 legislation allowing countervailing duties on imports from non-market economies (China) and the issue of ‘double remedies’ (whether both countervailing duties and anti-dumping duties can be levied at the same time).
The first case was a solid win for the United States. The second case was a split decision. It upheld the U.S. legislation but not ‘double remedies.’
To me these cases are in a long line of cases involving U.S. – China trade litigation in the WTO. Both parties are submitting their trade disputes to the WTO’s dispute resolution system. This is good. This takes these commercial disputes away from the glare of realpolitik and put them in a more regularized context that leads to peaceful solutions. This is a plus for both China and the U.S. Historically, this is a bigger deal ford the global trading system.
A WTO panel ruled against China in the Rare Earth Case brought by the United States and others. The United States argued that the Chinese export duties on rare earth materials were not justified under the “General Exception” of Article XX to exhaustible natural resources, they were not valid under Article XX conservation of resources, and China’s restrictions violated ‘trading rights.’ “WTO Issues Panel Reports on China’s Rare Earths Exports” WTO News (March 26, 2014). “U.S. Wins Victory in Rare Earths.” USTR News (March 26, 2014). “China Curbs on Metal Exports Found to Violate Trade Laws.” New York Times (March 27, 2014).
A WTO panel gave a split decision to China’s complaint against the United States in applying its new 2012 legislation allowing a countervailing duty action on imports from non-market economies. It upheld the U.S. legislation but held against it for failure to investigate possible ‘double remedies’ arising out of related antidumping actions. “WTO Issues Panel Report on US Measures on Chinese Products.” WTO News (March 27, 2014). “U.S. Welcomes WTO’s Rejection.” USTR News (March 27, 2014).