U.S. Takes Two China Trade Disputes to WTO

Feb. 13, 2011
Cases challenge U.S. steel imports and electronic payment services.

The United States said Friday it had taken trade disputes with China over U.S. steel imports and electronic payment services to the World Trade Organization.

The United States requested the Geneva-based WTO to establish two panels to settle the disputes, U.S. Trade Representative Ron Kirk said in a statement.

The WTO action marked an escalation in the long-running list of trade disputes between the world's largest economy and its fast-growing Asian rival.

One case addresses China's imposition of antidumping duties and countervailing duties on imports of grain-oriented flat-rolled electrical steel from the United States, the statement said.

The other case challenges China's allegedly discriminatory and restrictive treatment of U.S. suppliers of electronic payment services.

Previous U.S. attempts to resolve the two disputes directly with China had failed, the USTR said.

"We are troubled by the procedures and decision-making employed by China in its trade remedy investigations, which have now led to serious restrictions on exports of American steel," Kirk said.

"We also remain deeply concerned about China's continuing efforts to reserve its domestic payment card market for one state-owned enterprise, to the exclusion of American credit and debit card companies."

Kirk said that in each of those disputes, the "USTR will be pressing to ensure that we obtain the trade benefits provided by the WTO agreement, in particular the American jobs and economic growth at stake as a result of China's actions."

The United States accuses China of flouting WTO rules in applying additional duties on imports of the electrical steel, used by the power-generating industry in transformers, reactors and other large electric machines.

China imposed duties on specific steel imports in April 2009, saying the American steel had been dumped -- sold at less than fair market value -- into its market and was subsidized.

The USTR said that Chinas antidumping and subsidy determinations in the case appeared to violate numerous WTO requirements, including initiating the proceedings "without sufficient evidence" and failing to disclose "essential facts" underlying its conclusions.

"We have watched with growing concern China's resort to additional duties on U.S. exports," Kirk said.

"It is important to ensure that China is held to the WTO rules and so prevent any unjustified duties from affecting hundreds of millions of dollars of U.S. steel exports to China," he added.

The two largest U.S. manufacturers of electrical steel are AK Steel Corp., based in Ohio, and Allegheny Ludlum, based in Penn.

In the second case, the United States accused China of creating a "national champion" to monopolize the country's operation of electronic payment transactions, which it estimated was worth several hundred billion dollars in 2010.

While most of the world's top providers of electronic payment services for credit and debit cards are headquartered in the United States, the USTR said, China prohibits foreign suppliers from handling the typical payment card transaction in China.

"China's regulator of electronic payment services, the People's Bank of China, has issued a series of measures -- dating back to 2001 -- that provide a Chinese domestic entity, China UnionPay (CUP), with a monopoly over the handling of domestic currency payment card transactions in China while excluding other potential suppliers," the US trade office said.

Copyright Agence France-Presse, 2011

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