WTO top court largely upholds ruling on Chinese auto parts
www.chinaview.cn 2008-12-16 04:14:13 Print
GENEVA, Dec. 15 (Xinhua) -- The top court of the World Trade Organization (WTO) confirmed on Monday that a Chinese measure on auto parts imports has violated WTO rules.
In a report, the WTO Appellate Body largely upheld a panel ruling in July, which backed complaints made by the United States, the European Union and Canada.
But it overthrew one aspect of the July ruling, which said China's treatment of knock-down car kits contravenes the country's WTO accession commitments.
China considers auto parts as a complete vehicle if they account for 60 percent or more of the value of a final vehicle, and charges a 15 percent higher tariff on them.
The measure aims at preventing tax evasion by companies that import whole cars as spare parts to avoid higher tariff rates.
However, the three complainants argued that the Chinese tax measure deters automakers from using imported parts to build cars in the country, thus in violation of WTO rules.
A WTO panel decided in July that the Chinese measure was contrary to WTO rules and China's WTO commitments. China appealed the panel's conclusion before the WTO Appellate Body in September.
China now has a reasonable period of time to bring its measure into compliance with WTO rules. This period of time will be negotiated or determined by arbitration.
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China expresses regrets over WTO's upholding of auto part imports ruling
www.chinaview.cn 2008-12-16 19:48:52 Print
BEIJING, Dec. 16 (Xinhua) -- China on Tuesday expressed regrets over the World Trade Organization's (WTO) decision to uphold its ruling that Chinese auto parts import practices violated WTO rules.
The WTO Appellate Body said Monday it largely upheld a July panel ruling that backed complaints by the United States, the European Union and Canada.
But it overruled the aspect of the ruling that said China's treatment of knock-down car kits bypasses the country's WTO accession commitments.
China welcomed the overruling this decision as it supported an appeal by China to correct the WTO panel's mistakes, Yao Jian, spokesman of the Ministry of Commerce, said in a statement on Tuesday.
But China expressed regrets over the WTO's decision to uphold other aspects of the ruling, according to the statement.
China considers auto parts as a complete vehicle if they account for 60 percent or more of the value of a complete vehicle and charges a 15 percent higher tariff on those parts.
The measure is aimed to prevent tax evasion by companies that import whole cars piece-by- piece to avoid higher tariff rates.
However, the three complainants argued that the Chinese tax measure deters auto makers from using imported parts to build carsin China, thus violating WTO regulations.
A WTO panel decided in July that China's import practices defy WTO rules. China appealed the panel's conclusion before the WTO Appellate Body in September.
China now must bring its practices into compliance with WTO rules. The period of time in which China will expected to make this shift will be negotiated by arbitration.
Panel report: http://www.wto.org/english/news_e/news08_e/339_340_342r_e.htm
AB Report:
Appellate Body issues report on auto-parts dispute
The Appellate Body, on 15 December 2008, issued its report regarding complaints by the European Communities, the United States and Canada, respectively, against “China — Measures Affecting Imports of Automobile Parts” (DS339, 340 and 342).
Download:
> Findings and conclusions in pdf
> Full Appellate Body Report in Word
> Full Appellate Body Report in pdf
> Summary of dispute DS339
> Summary of dispute DS340
> Summary of dispute DS342
> More on the Appellate Body
> More on dispute settlement
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