17 Jul, 2012
U.S. Violates WTO Rule, Misuses Trade Protection Measures
Beijing, July 16, 2012 – China and the United States will begin official negotiations from July 18 to July 19, regarding the case that China had reported the U.S. anti-subsidy measures on 22 exported products from China to the dispute settlement mechanism of World Trade Organization (WTO).
China had proposed negotiations with the United States about its wrong anti-subsidy investigations against 22 products exported from China and officially launched the WTO dispute settlement procedure on May 25.
The case involved nearly 7.3 billion U.S. dollars and reflected the truth that the United States has violated the WTO rules in terms of trade remedies for a long time, said Li Chenggang, with the Department of Treaty and Law under the Ministry of Commerce of China.
Returning to real economy after suffering setbacks
“Suffering the impact of international financial crisis, the United States finally recognized that the virtual economy will be ‘water without a source’ and ‘a tree without roots’ once it breaks away from real economy. Therefore, reindustrialization has been accepted by more and more U.S. people,” said Bai Ming, deputy director of the Department of International Market Research at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.
In 2009, the Obama administration proposed a plan of returning to original mode of economic development, namely the mode of export-driven growth and manufacturing business growth. The plan was called “reindustrialization.” Judging from the development condition of the U.S. economy in 2012, the adjustment of its real economy has given initial results and the signs of recovery is obvious.
However, the United States will not just recover the traditional manufacturing business but develop an advanced manufacturing industry relying high and new technology and use new technological revolution results to reform and drive other industries forward, especially including new energy, information, biotechnology, medical treatment, environmental protection, marine, outer space and other emerging industries.
As the industrial restructuring, adjustment and upgrade of China are similar to U.S. strategy of revitalizing the manufacturing industry in many ways, the fierce competition, conflicts and mutual extrusion exist between the two countries, which led the United States to rear its head of trade protectionism.
Spokesman of China’s Ministry of Commerce Shen Danyang said in a statement that the United States really had misused its trade remedy measures in some ways, which damaged the legitimate rights and interests of Chinese enterprises, and Chinese government resolutely opposes to it.
Using undue trade protection methods to China
Some analysts pointed out that a series of practices recently made by the United States present new characteristics and tendency on its trade protection measures.
Firstly, the United States simultaneously takes defensive and offensive measures. On the one hand, it set up trans-department law enforcement center to strengthen the execution of its domestic trade laws and investigate whether the exported Chinese products have an unfair competitive edge in the state and whether these products will cause harm to the related industries of the state. Meanwhile, the United States also prevents competitive Chinese products from entering the U.S. market through anti-dumping and anti-subsidy investigation to Chinese products. On the other hand, the U.S. Government has promised to help U.S. enterprises open foreign markets especially the competitive agricultural products, engineering goods and service markets.
Secondly, in addition to the anti-dumping and anti-subsidy investigation, the United States had frequently used the “Section 337 Survey” in 2012 to crack down upon Chinese products in the name of protecting patent rights. The punishment under the “Section 337 Survey” is severer than the anti-dumping and anti-subsidy investigation and it can completely force any competitive products out of the U.S. market.
Thirdly, the United States has united with other advanced countries to put pressure on the export control of China’s raw materials including rare earth by using WTO and other multilateral platforms, trying to implement trade remedy under the signboard of “respecting international rules and procedures.”
Trade protection measures harm both sides
Regarding the United States’ action of implementing trade remedy measures immoderately, Bai believes that it benefits the United States and harms others in the beginning, but ultimately harms both the United States and others.
The United States’ action of topping importing a product from China but importing it from other countries at a higher price especially harms the U.S. market. Due to incapacities of some U.S. enterprises, the United States’ trade protection did not improve these U.S. enterprises’ competitiveness, Bai said.
Li said that the United States is the WTO member that has been accused most under the WTO frame. It has been involved in 116 cases, including more than 60 cases of accusing it for its trade remedy measures.
In addition to China, other WTO members, including countries of the European Union, have also brought accusations against the United States for its anti-dumping and anti-subsidy measures, said Li.
“The WTO members that pay attention to the United States’ situation of following WTO trade remedy rules are many,” Li said. “The United States should carefully re-examine its current situation of following two trade remedy rules and should follow the multilateral rules more loyally.”
Experts said that all WTO members must follow WTO rules strictly. The “fight” between China and the United States in the TWO means an action of safeguarding rights but not a trade war. It is an action guided by TWO rules and within the frame of WTO rules.
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