CHINA FACING SCRUTINY ON MULTIPLE FRONTS AT WTO

China continues to come under heavy scrutiny from its trading partners at the WTO.

The US on 11 October announced that it had requested the creation of a WTO dispute panel to examine its allegations that China's restrictions on the importation and distribution of copyright-protected goods such as books, journals, music, and movies contravened multilateral trade rules.

Specifically, Washington claims that Beijing's requirement that such goods be imported by state-approved or state-run companies discriminates against US distributors, violating WTO goods and services rules, as well as its own WTO accession commitments. It argues that by slowing the access of legitimately produced foreign books and movies, the restrictions encourage counterfeiting.

China can block the US' request for a panel, but will be unable to do so a second time.

Meanwhile, the US, the EU, and Japan called into question China's compliance with some of its market access commitments during a review of Beijing's implementation of its WTO obligations. China had to agree to such reviews as part of the price of its accession the global trade body.

At a 15 October meeting of the Committee on Market Access, the three leading industrialised powers drew particular attention to some Chinese export restrictions.

For example, the EU asked China to justify export limits on coke and certain non-ferrous metals, and to explain potential future limits on high-polluting steel industry products, including pig iron and steel scrap.

The US did the same for China's export quotas on raw materials including coke, silicon, tin, and zinc, saying the limits "significantly disadvantage" foreign producers reliant on the raw materials. Specifically, Washington expressed concern that the export limits had been imposed with "no comparable restrictions on domestic sales." Japan expressed similar concerns, suggesting that in light of Beijing's justification of the policy on "resource protection, environmental protection, and trade surplus reduction grounds," a failure to impose domestic restraint measures would leave China in violation of WTO rules on export restrictions.

The EU criticised joint venture requirements in China's auto and petrochemical sectors. Japan suggested that Chinese tariffs on some photographic products exceeded its WTO limits.

Sources report that the delegations repeated the acrimonious exchange typical of these reviews: the EU, Japan, and the US expressed dissatisfaction with China's answers, and China complained that some of the questions were inappropriate and even unrelated to its commitments or the WTO's mandate.

ICTSD reporting.