WTO Rules for U.S. in China Auto Duties Case

WASHINGTON -- The World Trade Organization ruled against China in a case brought by the Obama Administration charging that China levied improper duties on U.S.-manufactured autos exported there. The ruling calls on China to rescind antidumping duties and countervailing duties on American-made auto exports.

In December 2011, China imposed antidumping duties on American-made autos ranging from 2.0% to 21.5%, and countervailing duties ranging from 6.2% to 12.9%. The U.S. exports $8.5 billion worth of autos to the Chinese market. Of that total, $5.1 billion worth is levied illegal tariffs. The Obama Administration initiated a WTO challenge to the trade practices in July 2012.

While WTO members have the ability to levy antidumping duties and countervailing duties against other members -- when warranted and in accordance with WTO rules -- it was determined today that China inaccrately and improperly determined that American auto exports were hurting its domestic auto industry;failed to substantiate with appropriate evidence, per WTO rules, its claims that American autos were dumped and subsidized; and violated transparency and due process provisions of the WTO agreements. 

Today’s decision directly benefits auto companies and workers which export to China, including Chrysler, which has a Jeep plant in Toledo, and Honda, which has an Acura plant in Marysville. In 2013, the U.S. auto industry employed more than 838,000 workers and produced about $37 billion in economic output. Just in Ohio, one in every eight jobs is connected to the auto industry; one in every six cars produced in the United States is made in the state; and 80 of its 88 counties are home to an auto manufacturing facility.

U.S. Sens. Sherrod Brown and Rob Portman hailed the World Trade Organization’s ruling to protect the American auto industry from China’s illegal tariffs on U.S. automobiles. Brown, D-Ohio, and Portman, R-Ohio, had urged the U.S. trade representative to investigate the tariffs and use “all available tools to protect Ohio workers and businesses,” according to a joint statement issued by the senators. The two Ohio senators serve on the Ohio Auto Caucus.

“Today’s WTO decision is a significant step towards protecting our automakers from discriminatory trade practices,” said Brown, the caucus’ vice-chairman. “In order to protect the one in every eight Ohio jobs connected to the auto industry, we must ensure our manufacturers are competing on a level playing field. To achieve this, our trading partners need to abide by WTO rules. Further, in ongoing trade negotiations like the TPP, we need to include provisions that give our manufacturers equal access to our trading partners’ auto markets; and include provisions which will enforce these commitments.”   

“I first raised strong concerns with these unfounded Chinese actions nearly three years ago, and today’s ruling is a victory for auto workers in Ohio and across the country,” said Portman, the caucus’ co-chair, who initiated the first-ever legal case to be litigated and won against China before the WTO because of China's unfair treatment of U.S.-made auto parts. “China remains a vital export market for American goods and services, but China must follow global trade rules, and when they don’t, we’ll hold them accountable every time.”

Scott Paul, president of the Alliance for American Manufacturing, also praised the WTO decision. “Today’s ruling is further proof that China has repeatedly violated the rules of world trade.  Not content to simply manipulate its currency and massively subsidize exports, Beijing has also acted to protect its market with illegal tariffs on U.S. products.

 “We commend the administration for pressing this case at the WTO and urge them to move forward on other vital trade actions, including practices that target the U.S. auto and auto parts sectors.” 

Published by The Business Journal, Youngstown, Ohio.
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