The European Commission said it will launch the
first ever litigation against China at the World Trade Organization (WTO) by
seeking a settlement panel for an auto parts dispute on Friday.
The EU's executive body said it expected the United States and Canada also to
request the establishment of a panel on the same issue.
Chong Quan, spokesperson of the Ministry of Commerce, said China has not yet
received a formal request from the three parties, which had called on Beijing in
March to enter into talks on how to lower barriers to China's US$19 billion auto
parts market.
On Friday, they said the time for consultations had run out.
"We have tried again and again to find an acceptable, negotiated solution to
this issue; and without Chinese engagement, we have no alternative but to take
this course of action," EU Trade Commissioner Peter Mandelson said in a
statement.
The EU, the United States and Canada want China - which joined the WTO in
2001 - to change its rules on import tariffs, which they say hinder foreign auto
makers and car parts suppliers in China, now one of the world's biggest auto
markets.
China considers car parts as a whole vehicle if they account for 60 per cent
or more of the value of the final vehicle, and thus charges a higher tariff on
them, the Commission has said.
So far, China has been dragged into only one WTO dispute case, which was
filed by the United States over semiconductors but did not enter the legislation
stage.
In another development, foreign direct investment (FDI) in China dropped by
2.1 per cent from a year ago, to US$37.19 billion in the first eight months of
this year, according to the latest statistics released by the Ministry of
Commerce.
FDI in August alone fell 8.49 per cent from last year, to US$4.48 billion.
The ministry did not issue data on contracted foreign direct investment -
investment pledged but not yet delivered.
Investment in the financial sectors, including banking, insurance and
securities, is not included. Last year, China's financial sectors drew a total
investment of over US$10 billion.
(China Daily 09/16/2006 page1)
