Democrats

The WTO Swats China, So What?

July 21, 2008 ⋅  E-Mail Article ⋅  Print Article ⋅ Post a comment

The WTO has published a trade ruling against China by condemning the Chinese commercial practices of their country this past Friday. The WTO has stated that China has been breaking trade rules by taxing imports of auto parts at the same rate as foreign-made finished cars. The WTO has declared this action illegal but what now can be done? Talk about closing the barn door after the horses have all ran out. What punitive action or reciprocity should be enacted? The three-member WTO panel ruled against China on nearly every point of contention with the U.S., the 27-nation EU and Canada. Information based on the judgment states that the WTO found that China unfairly taxed imported auto parts coming into their company which resulted in companies closing their domestic plants and moving them to China. In what has amounted to an illegal tariff is what is now discouraging automakers from using imported car parts for the vehicles they assemble in China which as I stated earlier has resulted in car parts companies shift production to China, costing Americans, Canadians and many Europeans their jobs. The unfair treatment has affected U.S.-based Delphi Corp., Robert Bosch GmbH in Germany, and several other auto companies to name just a few. China claims the tariffs are intended to stop whole cars being imported in large chunks but the U.S. and the EU say that China promised not to treat parts as whole cars when China was allowed to join the WTO in 2001. China’s car-making market has grown recently and it is now considered to be the world’s third leader in auto sales trailing only the United States and Japan. Unfair China trade has caused hostility with Europe and the United States as their trade deficits with China have super-heatedly grown. Many blame the Bush administration’s trade policies for the imbalance with China and many also believe this is the cause of millions of lost American manufacturing jobs. This is in addition to the accusations that there are Chinese government subsidies for manufacturing which were proven to be true and the issue was settled out of court.

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