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US rejects China’s request for panel on subsidy duties

Keywords: Tags  WTO, China investigation, nonmarket economy, subsidy probe, steel pipe, aluminum, WTO, electrical steel Catherine Ngai

NEW YORK — The United States has rejected China’s request to set up a dispute settlement panel at the World Trade Organization (WTO) over alleged illegal subsidy duties to nonmarket economies.

During a meeting Friday at the international organization, China said that the U.S. government since 2006 has launched more than 30 countervailing duty investigations against its products—including steel pipe, aluminum extrusions and oil country tubular goods—that affect more than $7.3 billion in Chinese goods. These investigations are unlawful because U.S. countervailing duty laws shouldn’t apply to nonmarket economies, such as China, it added.

The issue dates back to earlier this year when President Barack Obama signed a bill giving authority to the U.S. Commerce Department to apply subsidy duties to nonmarket economies, a decision lauded by domestic steel interests (, March 13). In September, China challenged the law at the WTO, noting that "double counting"—when both countervailing and anti-dumping duties are imposed on a product, causing the offsetting remedy to be calculated twice—can occur (, Sept. 21).

The United States on Friday said that it didn’t agree with the establishment of a panel, adding that its legislative measures are "fully consistent" with its WTO obligations. Under WTO rules, the establishment of a panel is automatic upon a second request.

China also submitted a report on friday regarding its intent to implement recommendations concerning a ruling on grain-oriented electrical steel (, Nov. 16). China added that it would implement the recommendations in a manner that "respects its WTO obligations" and would be discussed with the U.S. government within a reasonable period of time.

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