China has suffered its first legal defeat since joining the World Trade Organisation in 2001. A WTO dispute panel confirmed on Friday an interim February judgment following complaints about imported autoparts pricing in China by the United States, the European Union and Canada.
China considers auto parts as a complete vehicle if they account for 60
per cent or more of the value of a final vehicle and charges a higher
tariff on them. In 2006 the WTO panel began investigating China’s
surcharge on imported car parts, and has now ruled that its tariffs
violated fair trade rules by discriminating against imported parts.
The duty on complete cars is typically 25 per cent, compared with about
10 per cent for car parts. Chinese trade officials said the measure is
meant to keep "lawbreakers" from exploiting the differences between
tariff rates for importing entire automobiles and auto parts, and to
protect consumer interests.
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