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Madison, WI 53707-7970
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Vol.
7 #4, March 2008
China Loses First WTO Case
The World Trade Organization ruled against China for the first time on
February 14. The precedent-setting case was brought by the United
States, Canada, and the European Union over unfair barriers to imports
of foreign car parts. It is expected to spur further challenges
and increased efforts to force China to open its markets. It was
argued that Chinese tariffs were discouraging auto makers from using
imported car parts for the vehicles they assemble in China. As a
result, car parts companies had an incentive to shift production to
China, eliminating production in the United States, Canada, and
Europe. China can still appeal the ruling. The Chinese
government has argued that the tariffs are intended to prevent nearly
finished autos from being imported with minimal assembly being done in
China in order to circumvent higher tariff rates for finished cars.
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