U.S. Wins WTO Dispute With China Over Auto Imports, Froman Says

May 23, 2014 10:30 am ET

May 23 (Bloomberg) -- The World Trade Organization backed the U.S. in a dispute with China over sales of General Motors Co. and Chrysler Group LLC cars and sport-utility vehicles, the U.S. Trade Representative said.

The WTO, a global trade arbiter, found that China’s duties on U.S.-made vehicles breached international rules, U.S. Trade Representative Michael Froman said today in Washington. The decision follows recent victories involving specialty steel and chicken broiler parts, Froman said.

“This is the third time that the United States has prevailed in a WTO dispute challenging China’s unjustified use of trade remedies,” Froman said in a statement. “Each time, a WTO panel of experts has made clear that China has no basis whatsoever for imposing duties on American goods.”

Officials from the Chinese Embassy in Washington didn’t immediately respond to a request for comment on the WTO ruling.

The U.S. this week dramatically escalated the trade battle with China, accusing five military leaders of stealing corporate secrets. The indictments are on top of complaints over issues such as tires, chicken parts, clean-energy products and credit- card payment services.

President Barack Obama’s administration in 2012 lodged a complaint with the Geneva-based WTO challenging Chinese duties on auto imports from the U.S. A separate U.S. complaint that year said China, the world’s second-largest economy, unfairly subsidized its auto and auto parts manufacturers. That case is still under consideration by the WTO.

China Cases

Since 2009, the U.S. has filed 17 cases at the WTO against China and other nations, including Indonesia and India, according to the U.S Trade Representative’s office. The U.S. doubled the rate of filings against China over that time.

In March the WTO backed the U.S. in one of those cases, agreeing that China’s limits on exports of rare-earth elements used in hybrid-car batteries and wind turbines violate trade rules.

The automobile issue has drawn recent attention. The U.S. in July 2012 filed a WTO complaint seeking to offset Chinese duties on more than $3 billion worth of auto imports from the U.S. The Beijing government had alleged that the U.S. industry gained an unfair edge in trade by using government subsidies and selling the goods in China below their value, a practice known as dumping.

Two months later, the U.S. filed the second WTO case against China alleging the Beijing government subsidized its own auto and auto-parts makers in violation of global trade rules.

“Today’s ruling is a major victory for American workers and manufacturers and another blow to China’s continued illegal trade practices,” Senator Debbie Stabenow, a Michigan Democrat, said in a statement. “It is long past time China recognize that its repeated attempts to flout the rules will not be tolerated.”