TPT November 2012
Global Marketplace
In its WTO filing on the automotive exports, the US accused China of providing at least $1bn worth of subsidies from 2009 to 2011. Mr Bradsher cited Chinese customs data that put Chinese exports of automobiles and auto parts at a total of $56bn over this period. He wrote, “Even if China were forced by the WTO to reverse the subsidies, the effect on Chinese exporters’ total costs might not be significant.” But the Times’ s Hong Kong bureau chief also pointed out that, while China exports virtually no fully assembled cars to the US, it has rapidly expanded its exports to developing countries. Those exports compete to some extent with cars exported from the US. (“US Files Trade Case Against China Over Cars,” 17 September) Hours after news of the American trade case began to circulate, but before its actual filing, China’s commerce ministry announced on its website that it was filing a WTO case of its own, alleging unfairness in the American method of calculating penalty tariffs in anti-subsidy cases. The timing of the action, apparently coincidental, was even so typical of the tit-for-tat pattern that has come to define China and the US at the WTO. The US complaint against China came at a critical point in the recent presidential campaign, as auto manufacturing states in the upper Midwest turned into battlegrounds. But its real importance may lie in what it signifies for a global trading system that rests, at least in part, on the assumption that companies will defend operations in their home countries by filing anti-dumping and anti-subsidy cases against importers. “That logic has eroded in recent years in the case of China,” wrote Mr Bradsher, “as practically every Western multinational company – and a growing number of smaller companies as well – has moved factories and other operations to China and become reluctant to risk retaliation by filing trade cases.” › He cited the example of labour unions, which have the legal standing to bring many kinds of trade cases in the US, but seldom do so. With the exception of the United Steel Workers, which filed a legal petition in 2010 for the administration to review imports of energy-efficient technology, unions have shown a reluctance to file trade cases because of the six-figure and even seven-figure legal fees involved. But nations can file WTO complaints; and Michael Wessel, a longtime trade adviser to the United Steel Workers, told the Times that American unions were eager for the government to file cases. This, Mr Wessel said – in reference to the case filed 17 September against China – “may be the start of a major shift in the US approach to trade enforcement.” › The somewhat more confrontational US stance towards China in trade matters happens to come as Chinese trade surpluses erode and capital flight from China increases. But China’s ownership of $1.2tn of US debt is also a factor worthy of consideration, and Mr Bradsher concluded on what sounds like a cautionary note. “China,” he wrote, “remains the largest foreign holder of [US] treasuries.”
automotive suspensions. The same Japanese partners have a US operation: Kobe Aluminum Automotive Products LLC (Bowling Green, Kentucky). As reported by the Tokyo-based daily Asahi Shimbun , first- phase construction at KAAP China required an investment of $31.5mn. The second, $57.5mn, phase is set for completion in March. According to forgingmagazine.com (23 August), KAAP China aims to supply anticipated greater demand for automotive parts in China, including parts for lighter-weight vehicles that meet stricter fuel consumption regulations. Aluminium suspensions are seen as a critical element of this market developing among Japanese, US and European auto makers. Of related interest . . . › On 31 August, the US blocked a request by China for World Trade Organization judges to probe American anti- subsidy measures targeting 22 products including steel pipes. The Chinese case, which involves exports worth $7.3bn, follows a 2009 complaint against US duties on imports of circular welded carbon quality steel pipe, light-walled rectangular pipe and tube, and other products. In that case, the WTO’s Appellate Body concluded in March 2011 that the US Commerce Department violated global trade rules with its determination that state-owned suppliers of goods to Chinese producers targeted by the anti-subsidy duties were “public bodies” and therefore provided government financial contributions to manufacturers. Other issues between China and the US at the WTO include a US complaint against China over access for products including grain-oriented flat-rolled electrical steel and cars. Together with the European Union and Japan, the US filed a WTO complaint in March challenging Chinese export limits on rare-earth minerals. Automotive A US case at the World Trade Organization may signal a growing Western combativeness toward China In another notable WTO complaint, the US on 17 September filed a broad case against China alleging unfair subsidies for car and auto parts exports. The American action came just 11 days after the European Union agreed to start the world’s largest anti-dumping action ever, against imports of solar panels from China. Writing from Beijing in the New York Times, Keith Bradsher characterised the US trade case as “the latest sign of a greater willingness by Western governments to confront China”.
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November 2012
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