WTO rules against China over auto parts dispute

July 19th, 2008 - 4:21 pm ICT by IANS  

Geneva, July 19 (Xinhua) The World Trade Organisation (WTO) has ruled against China over its imported auto parts dispute saying Chinese taxes violated WTO rules. Friday’s ruling on a complaint by the United States, the European Union and Canada upheld an interim verdict given in February by the trade body.

China considers auto parts a complete vehicle if they account for 60 percent or more of the value of a finished vehicle and charges a higher tariff on them.

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.

However, the complainants argued that the Chinese tax measure deters auto-makers from using imported parts to build cars in the country, which costs jobs abroad.

This is the first time that the WTO has ruled against China in a trade dispute. China has the right to appeal the verdict.

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