China regrets US action on auto parts
Source: Reuters/chinadaily Date: 2006-04-05
China voiced regret on Friday that the European Union and the United States had turned to the World Trade Organisation to try to prise open the country's $19 billion car parts market to more imports.
The row is the latest in a series of trade disputes sparked by China's growing global clout, which will be high on the agenda when President Hu Jintao visits Washington on April 20.
It is the first time the EU's executive Commission has taken China to the WTO since Beijing joined the trade watchdog in 2001. It is the second case Washington has brought against Beijing.
"The Chinese side expresses regret over this and is earnestly studying the request for consultations by the EU and the United States," a statement on the Ministry of Commerce's Web site (www.mofcom.gov.cn) quoted a spokesman, Chong Quan, as saying.
On March 30, the ambassadors of the EU and US missions to the TWO informed Chinese ambassador Sun Zhenyu to the WTO, requesting consultations under the WTO mechanism for settling disputes concerning China's policies for auto industry development, Chong said.
Brussels and Washington want Beijing to change certain tariff policies they say hinder Western auto makers and car parts suppliers in China, now one of the world's biggest auto markets.
China has 10 days to respond to the request and must start consultations within 30 days. If the issue cannot be resolved within a further 60 days, the EU and the United States may request a WTO panel to hear and rule on the dispute.
The EU and United States have long complained about a lack of access in general to China's fast-growing markets as well as piracy and counterfeiting of Western goods.
They have also accused China of unfairly helping its exporters. Brussels is due to start applying anti-dumping tariffs on Chinese leather shoes next week and Washington says China deliberately holds down the value of the yuan.
A newspaper published by the Commerce Ministry on Friday chided some EU nations for blaming Beijing for their own shortcomings.
The International Business Daily quoted an official from think-tank at the ministry as saying higher labour and production costs were eroding the 25-nation bloc's competitiveness.
Some EU governments were prone to blaming outside factors, like China's exchange rate or unfair trading practices, for their own commercial problems.
"They take anti-dumping measures to transfer their responsibilities," the paper quoted Zhao Yumin as saying.
The frictions over trade coincided with the fastest period of export growth that the country has ever seen, the paper said.
Senior officials have said that strains are inevitable in such circumstances and have repeatedly called for problems to be resolved at the negotiating table.
This was what happened last year when China agreed with Brussels and Washington on new textile export caps after a surge in Chinese shipments, triggered by an end to global quotas, led to a clamour for protection from EU and U.S. producers.
Carmakers have flocked to China to set up joint ventures.
China considers parts a "whole vehicle" if they account for 60 percent or more of the value of the final vehicle and charges a higher tariff on them, the European Commission said.
The rule appears designed to help Chinese car parts makers, officials in Brussels and Washington say.
Both U.S. Trade Representative Rob Portman and EU Trade Commissioner Peter Mandelson said they still hoped the dispute could be resolved before the WTO formally establishes a panel to hear the case.
But Portman also warned China to expect more WTO complaints if U.S. concerns over piracy and market access barriers cannot be resolved through negotiations.
