China Calls the U.S. out to the WTO

China Calls the U.S. out to the WTO

China is sounding a bit skeptical about the U.S. tire tariffs, and probably with good reason. This one is coming back to the surface after a few months of being overshadowed by many other issues of international concern and diplomacy- when you are trying to figure out the environmental road map for the world to save the world and arguing about a global recession and what to do about it, well, you sort of put the discontent about import taxes on one item on the backburner. The thing about the tires, though, are that they are a big ticket item and both the U.S. and China know it. The U.S. is basically running into some trouble with them because we don’t want their tires to cost less than our tires, and China is arguing over World Trade Organization (WTO) rules that are in a bit of  a grey area from earlier in the decade. And so it goes.

The U.S. charges a duty on Chinese-made tires that China thinks is unfair. And so China did what any good business person would do- they appealed to the governing body, the WTO, and said what’s going on? The U.S., in a move that closely parallels what the Republicans are doing around the health care reform legislation in the senate, basically made a bunch of procedural moves and deftly stalled the call by China for a probe. The global chess match is on- the rubber, so to speak, has hit the pavement on this one. And the WTO, dubbed the global trade umpire (ohhh!), is calling the shots.

Specifically, China has requested that the WTO form an expert panel to examine whether or not the “special safeguard” duties that the U.S. created on Chinese-made tire imports are even legal. Imagine trying to figure out the bottom line on that one. Wow. The way it will work for now is that the issue will get pushed to the next meeting next month and then China will call for it again, and then it will happen- which could take half a year. Then whoever loses the decision will probably take issue with the result and it will end up in the hands of the WTO judges.

"The U.S. government decision to impose the duties lacked a factual basis, and was thus in violation of the relevant WTO rules. This so-called special safeguard was bowing to pressure from domestic protectionism, and violated the international consensus to avoid protectionist measures against the backdrop of the financial and economic crisis," said a statement in the Chinese press from the government.

Lacked factual basis! Love it. The things countries will say to each other. But I have to give it to them- whether we can get out of dropping the duty or not, it is pretty blatant domestic protectionism- and I’m happy that we did it. We have to fight the good fight.

And this is just one of many reasons why we need to get WAY out in front on green and clean tech stuff- if not, we will quickly find ourselves buying everything from China and get beat by our own global economy rules.

Photo Credit: cobalt123 (via Flickr under CCL)