China hails WTO ruling

US urged to correct trade remedy wrongdoings

China's commerce ministry has urged the US to correct its wrongdoings in abusing trade remedy measures that affect China's annual exports totaling $7.2 billion, ahead of Wednesday's opening of a high-level bilateral talk.

The World Trade Organization (WTO) ruled on Monday in its Appellate Body Report that the US had acted inconsistently with the WTO rules with regard to its countervailing and anti-dumping measures on certain products from China.

China's Ministry of Commerce (MOFCOM) responded in a statement late Monday that the report was a significant victory of China's challenge against the US abuse of trade remedy measures through legal means.

The US undertook 25 actions against Chinese products ranging from photovoltaic cells to tubular goods between 2006 and 2012. The MOFCOM estimates that the annual export value of these products exceeds $7.2 billion and involves significant trade interest of China.

The ministry also urged the US to respect the WTO rulings and correct its wrongdoings in abusing trade remedy measures as soon as possible to ensure an environment of fair competition for Chinese companies.

However, the WTO's Appellate Body was unable to complete the analysis on whether the US' GPX Legislation was consistent with the WTO rules due to insufficient factual analysis made by the panel, MOFCOM said.

"The body did not say that the legislation violates the WTO rules, otherwise it would have been an unalloyed success for China," Gong Baihua, consulting director with the Shanghai WTO Affairs Consultation Center, told the Global Times on Tuesday.

China had stressed that the GPX Legislation, which was signed by US President Barack Obama in March 2012, violates the WTO rules and places Chinese enterprises under an uncertain legal environment by allowing for the application of countervailing measures to non-market economy countries.

"The decision allows US industries to continue to rely on US trade laws to address unfair competition from their subsidized Chinese competitors," Reuters quoted US Commerce Secretary Penny Pritzker as saying on Monday.

The WTO rulings, Gong noted, still indicated that China has made significant progress in learning about how to play by WTO rules in dealing with trade frictions.

"More importantly, the rulings will encourage more Chinese companies to use the WTO to protect themselves when treated unfairly in the global trade," he said.

China has also decided to lower anti-dumping and countervailing duties on US chicken products from Wednesday in the wake of last year's ruling by the WTO.

The country will levy anti-dumping taxes ranging from 46.6 percent to 73.8 percent and countervailing duties ranging from 4 percent to 4.2 percent on US chicken products, the MOFCOM said in a separate statement on Tuesday.

The anti-dumping and anti-subsidy duties were previously set at up to 105.4 percent and 30.3 percent, respectively, in 2010.

The ministry said it had found evidence that US chicken exporters dumped products in the Chinese market and caused substantial damage to the domestic industry after a re-investigation.

"The domestic market recovered in 2010 and 2011 due to falling imports of US chicken products, but a series of food safety scandals and the deadly H7N9 bird flu since late 2012 diminished domestic consumption, bringing losses to the industry," a former official from the China Animal Agriculture Association told the Global Times on Tuesday on condition of anonymity.

China's broiler chicken industry posted a loss of more than 100 billion yuan ($16.1 billion) in 2013, Fujian Sunner Development Co, a chicken producer, stated in its annual report in April, citing data from the association.

The continuation of anti-dumping and countervailing duties, although at lower rates, will protect the domestic industry, because cheap US exports of chicken paws that Americans do not eat will hurt Chinese producers, according to the former official.

The decision was announced before the sixth round of China-US Strategic and Economic Dialogue, which is scheduled to be held in Beijing on Wednesday and Thursday. Top officials are expected to address a wide range of topics including economic issues during the meeting.

"Besides resorting to the WTO, the bilateral dialogue mechanism also serves as a platform for the US and China to solve trade frictions through negotiations," Gong said.