Disputes in Brief

1 February 2008

• A WTO panel has ruled against China’s tariffs on auto parts in a dispute brought by Canada, the EU and the US. The complainants alleged that China had violated it market access commitments through the imposition of 25-percent import duty on certain car parts instead of its scheduled most-favoured-nation tariff of 10 percent. The higher duties are on par with the MFN tariff for entire cars, and apply to imported components that make up more than 60 percent of a vehicle manufactured in China.

The complainants had charged that China’s motivation was to favour its domestic auto part industry and to push foreign manufacturers to relocate their production to China. In its defence, China had argued that the measure was intended to discourage manufacturers from importing entire vehicles as spare parts in order to circumvent the 25-percent tariff levied on fully assembled autos (Bridges Year 10 No.6 page 6).

The confidential interim ruling was handed to the parties on 13 February. Although the latter may seek changes to the report, panels have virtually never amended their interim findings following such comments. The final ruling is likely to be publicly circulated in March.

• The EU and the US are also reportedly on the verge of launching a dispute on China’s restrictions on the supply of financial information services. At issue is a September 2006 administrative measure, which obliges foreign providers of financial information (Bloomberg, Dow Jones, Reuters, etc.) to go through an agent designated by the Chinese news agency Xinhua to distribute their products rather than offering their services directly to customers. China has argued at the WTO Committee on Financial Services that the suppliers cited by the complainants are news agencies rather than financial information providers. While China has agreed to open up its financial information sector, it has not undertaken any market access commitments on news agency services.

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