GENEVA, Switzerland (Sept. 16, 2009) — China has petitioned the World Trade Organization (WTO) to seek relief from the U.S.'s recent decision to impose higher tariffs on Chinese-sourced consumer tires, but the review process could take a year or longer.
In its petition, China argues that the U.S.'s action is inconsistent with provisions of the Generalized Agreement on Trade and Tariffs (GATT) 1994 — to which both the U.S. and China are signatories — because the U.S. “does not accord the same treatment it grants to passenger and light truck tires originating in other countries to the like products originating in China.”
Seeking relief through the WTO has precedence, but the process could take more than a year to resolve, according to WTO documentation.
The first step in the WTO's review process is to have the U.S. and China conduct bilateral consultations for up to two months, the WTO said. If they are unable to resolve their issues, China will then have the option to ask the WTO members to establish an independent legal panel to examine its complaint against the U.S.
The panel has up to six months to look into the matter and report its findings to the affected parties and an additional three weeks to issue a final report to all WTO members. The Distpute Body Panel then has up to 60 days to adopt or reject the findings.
The parties then have the right to appeal, based on legal interpretation of the findings; that process can take up to three more months, the WTO documents show.
In its petition, China also argues the U.S. cannot justify the measures it took as “properly applied exceptions” to fundamental WTO principles, and the U.S. statute authorizing these China-specific restructions “impermissibly defines ‘significant cause' more narrowly than required by the ordinary meaning of that phrase” as it applies in documents relating to China's membership in the WTO.
China also takes exception with the U.S. government's interpretation of a number of aspects of the tire import issue, including how it defined material injury or threat of material injury, market disruption, the pace of increase in imports over time and the length of remedy.
The WTO is the only global international organization dealing with the rules of trade between nations, according to its mission statement. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters and importers conduct their business.