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Strategies & Market Trends : True face of China -- A Modern Kaleidoscope -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (247)	9/20/2006 8:32:49 PM
From: RealMuLan	Read Replies (1) \| Respond to of 12464

China warns it may stop talks over tariffs spat Jin Jing 2006-09-19 www1.shanghaidaily.com CHINA may stop its negotiations with the European Union, the United States and Canada after they requested the World Trade Organization to convene a special panel to rule on a dispute over auto parts tariffs, an official warned. "There have been trilateral discussions between a delegation led by China's department of treaty and law and related parties," said an official from the Department of WTO under the Ministry of Commerce yesterday. "But we couldn't rule out the possibility that we may halt the talks in the near future as our regulation (over the tariffs) was not a break with our WTO commitment." Last Friday, the EU, United States and Canada jointly requested the establishment of a WTO panel to rule on China's tariffs on auto parts. China levies an extra 15 percent duty on imported car components if they make up 60 percent or more of the value of a final vehicle, which equals to the tariff on imported whole vehicles. The EU believes the rule imposes a cost disadvantage on foreign carmakers and forces them to source more parts from Chinese suppliers. Chong Quan, a spokesman for the ministry, expressed regret yesterday in a statement posted on its Website, reiterating that the rule aims to prevent automakers taking advantage of different import tariffs on complete models and auto parts to escape customs supervision and evade taxes. It is the first litigation measure taken by the EU and the United States in the first-ever trade conflict involving China's auto industry, following similar disputes in the shoe and textile sectors. China was offered a compromise after the concerned parties launched a 60-day WTO consultation on the auto parts dispute between March and May although no final solution has been worked out. In July, China postponed the effective date for the measure that will charge higher tax on certain imported auto parts until July 1, 2008, but the EU thinks it is still too soon. Under WTO rules, China may block the first request, in which case the request will be presented a second time in October. The creation of the panel cannot be blocked a second time. A proceeding before the panel usually takes an average of 12 months. An appeal against a decision before the Appellate Body is possible.