China Loses its First WTO Case

Filed in archive Law on February 17, 2008

"Woof, woof!" Those were the words of the World Trade Organization's global trade watchdog to China, according to the PanAsianBiz blog.

According the Agence France Press (AFT), the case is the first time China has been the subject of a complaint that went all the way through to the WTO's Dispute Settlement Body since it joined the WTO in 2001.

The case involves tariffs on the importation of car parts into China. In order to nurture its own parts industry, China places a tariff on cars when more than 60% of the parts on them are imported. That tariff means those made-in-China cars are taxed at the same rate as if they'd been imported whole.






The United States, the European Union and Canada brought a complaint to the WTO over the tariff.

The WTO ruling it not yet public. Confidential documents have been leaked by diplomats in Geneva on condition of anonymity, according to the AFT.

The ruling could serve to make the U.S. more aggressive at the WTO in an effort to solve disputes with China. Among the issue that could be next, intellectual property rights disputes like copyright and pirating.

China's blocking of many U.S. Internet web sites has also been discussed recently as a free trade issue. The WTO could eventually become one path for fighting censorship of the Web in China.