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People's Daily Online>>Opinion

WTO ruling subtle support of protectionism

(Global Times)

08:21, September 07, 2011

The latest WTO ruling against China's appeal over US tire tariffs ended up with both sides losing from a business perspective.

China's tire industry will suffer $1 billion in losses annually and hundreds of thousands of jobs are at risk. American consumers will lose access to cheap and quality tires while the tariffs will not bring factories having relocated overseas back to the US.

The WTO, which is supposed to facilitate free trade, has rendered a disappointing verdict and sent a subtle message that, if interpreted more widely, may encourage more protectionism. The ruling means the US can slap a 35 percent import tax on Chinese tires.

The US has scored political points here.

The first major trade disputes that emerged soon after President Barack Obama took office two years ago have seen politicians, lacking real solutions to boost employment rates, take a hardline stance against trade partners to disillusion voters.

When the United Steelworkers raised the anti-dumping allegation against Chinese imported tires, the American tire industry was reluctant to support the tariff. The Obama administration caved in to various special interest groups, from setting up a Buy America provision to appeasing Wall Street fat cats.

The WTO ruling on Monday seems to strengthen the impression that the US is a victim of unfair trade despite large amounts of cheap exports of daily products keeping the US from sinking further into inflationary hell. American manufacturers have also chosen to move factories overseas to save every penny they can.

The WTO verdict actually revealed that China is still green when working within the global trade dispute arena. Chinese commerce departments and industrial associations should have a hard look at their strategies to respond to various trade barriers.

For example, the China Rubber Industry Association failed to fully present its case against the US International Trade Commission in Congress. The Ministry of Commerce can also work with industries to collect evidence and choose the best strategy.

The US is good at crying foul even it broke the rules first. There are also countermeasures China may consider adopting to make the US share the real pain.


Leave your comment2 comments

  1. Name

micnzHOOsjSJBHE at 2011-11-02193.105.210.*
Good report, please keep going on.
max at 2011-09-07175.140.139.*
Please Singapore"s legal expertise on international laws. You will better chance of winning in future. China is, comparatively and elatively speaking, a young country with as yet inadequate experience and knowledge. Use Singapore to your advantage.

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