News & Current Affairs
18 July 2014
US loses multi-billion dollar court cases against China and India
The World Trade Organization agreed on Monday this week to side with claims against the United States made by both China and India concerning US-imposed tariffs on products exported to America.
In both instances, the WTO ruled against the US and decided in favor of the major BRICs countries, who for two years now have each asked the organization to intervene and weigh in on America’s use of tariffs to tax certain imports dating back to 2007.
With regards to both cases, the WTO’s judges ruled that the US acted “inconsistent with its agreement on subsidies and countervailing duties,” or taxes imposed on goods sold by “public bodies.”
In China, the panel agreed, US officials improperly levied those taxes against state-owned enterprises that the WTO does not consider to be “public bodies.” Instead, the WTO said, those entities were majority-owned by the Chinese government, but did not perform “government function” or exercise “government authority,” according to the Financial Times. With respect to India, the WTO again agreed that the US was wrong to similarly treat state-owned National Mineral Development Corporation as a public body, according to the International Business Times.
At issue were billions of dollars’ worth of Chinese steel products, solar panels, aluminum, paper and other goods shipped to the US after being taxed as originating from public bodies. The panel’s decision, Reuters reported, “reflected a widespread concern in the 160-member WTO over what many see as illegal U.S. protection of its own producers.”
“China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises,” China’s commerce ministry said in a statement.
Mike Froman, the US trade representative, responded by saying Washington was “carefully evaluating its options, and will take all appropriate steps to ensure that US remedies against unfair subsidies remain strong and effective”.
Nevertheless, Froman added that the WTO’s ruling in the Indian case constituted at least a partial victory for the US.
"The panel's findings rejecting most of India's numerous challenges to our laws and determinations is a significant victory for the United States and for the (US) workers and businesses making these steep products," he told Reuters.