New WTO Ruling Welcomed by China

Countries are permitted to enforce antidumping duties on products that are imported but which are being sold for much less than they would be sold at in their home countries, according to the rules of the World Trade Organization. There are unfortunately no clear lines in regard to establishing what would be considered fair in determining the domestic price, and importers are therefore left to use their own discretion in working out the duties that need to be paid. The World Trade Organization recently looked at the duties imposed by the U.S. on goods from China and have adjusted their ruling.

China was relieved when the World Trade Organization revealed that they were not in agreement with the duties imposed by the United States. Previously, Washington had stated that some of the goods were subsidized and not priced fairly, which the World Trade Organization supported. The organization has now looked into four products specifically, which they believe are not being given fair duties in accordance to their regulations.

In 2008, China approached the World Trade Organization and requested an investigation into anti-dumping duties being imposed on sacks, steel pipes, tires and tubing manufactured in China. It was ruled that Chinese state-owned enterprises cannot be seen as a public body, and the United States is therefore obliged to use non-market economy methods. This is a great concern for the United States, as countervailing duties and anti-dumping duties are often used to discourage the import of products. The Chinese, however, are satisfied with the outcome and believe it is a step in the right direction for fair trade.

Ron Kirk, a U.S. trade representative raised his concerns by saying: “I am deeply troubled by this report. It appears to be a clear case of over-reaching by the appellate body. We are reviewing the findings closely in order to understand their implications.” Democrat Jim McDermott was also not in favor of the ruling, commenting: “The WTO is an extremely important international institution. But appellate body overreach will only undermine confidence in the WTO as an institution — and will only make it more difficult to reach new agreements to liberalize trade.”