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China Auto Parts Conflict To Intensify At WTO

China is on collision course with the U.S. and other trading partners in a WTO row over auto parts.

An uncompromising China is on collision course with the U.S. and other trading partners in a WTO row over auto parts, a U.S. trade official said Oct. 20.

The case is likely to become the first involving China to wend its full way through the World Trade Organization's dispute settlement process, Deputy U.S. Trade Representative Karan Bhatia said. Bhatia is visiting China this week to press a raft of U.S. trade demands, including an end to Chinese subsidies that he argued protect state-owned industries from foreign competition.

China last month blocked an attempt by the EU, the U.S and Canada to seek a WTO ruling on the legality of Beijing's tariffs on foreign auto parts. However, WTO members can only use the blocking tactic once and arbitration panels are usually created at the next session of the Geneva body's dispute settlement body.

"We've had no indications from the Chinese that they're prepared to address this area to our satisfaction and so I fully do expect the panel will be formed," Bhatia said. The auto case was "symptomatic of policies in other areas, where we're concerned we're seeing signs that China, either through subsidies or through policies that favor domestic industries, are distorting the playing field".

The auto parts complaint is only the second against China since it joined the WTO at the end of 2001.

China must abide by its trade promises, both to the WTO and bilaterally to the United States, Bhatia said. "Needless to say that we believe it's critically important that commitments made be commitments honored," he said.

Copyright Agence France-Presse, 2006

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