The Middle Kingdom Strikes Back: China Files WTO Case Against the U.S.

China announced today it has requested consultations with the United States over the imposition of U.S. duties on certain Chinese paper products. This is WTO-speak for: “We’re filing a lawsuit”. This marks the first time China has ever used the WTO dispute settlement procedures on its own (it joined in Europe’s suit against the U.S. steel tariffs).



The robust U.S-China trade relationship has hit a few bumps in recent years, and the new relatively anti-trade Democratic Congress has made things worse by threatening all sorts of nasty sanctions against China. To take the pressure off, the U.S. government has, for the first time, imposed anti-dumping and countervailing duties on Chinese goods on the theory that certain Chinese imports are being dumped below cost or are being unfairly subsidized. The U.S. has also filed four different cases against China at the WTO.



So China is finally fighting back. And it is interesting that it has chosen to use the WTO dispute settlement mechanisms. This is a wise strategy, at least from the Chinese point of view, since a WTO ruling in China’s favor will shift the blame (somewhat) from China to the WTO, in the eyes of the U.S. Congress. Usefully, a positive WTO ruling could also deter other countries (like Europe) from imposing similar duties on Chinese goods. And if China loses, well, it’s no worse off than it was before (aside from having to pay some lawyer fees, which I’m sure it can afford these days).



As a side note, it is cool that the Chinese government now posts so much stuff online. Of course, they don’t say much, but it’s a start. Indeed, the Chinese Ministry of Commerce actually allows you to send them letters with advice or complaints. See the top right hand corner (on the Chinese language version, the box is at the bottom, but hey, at least it’s there!).



In any event, here is the official press release in its entirety:



中国就美国铜版纸反补贴暨反倾销措施启动WTO争端解决程序



2007年9月14日，根据“WTO争端解决规则与程序谅解”第4条，“1994年关贸总协定”第23条，“反补贴协定”第30条和“反倾销协定”第17条，中国政府通过常驻WTO代表团致函美方，就美对铜版纸反补贴暨反倾销措施提起了WTO争端解决项下的磋商请求。



The English version is here:



On September 14, Chinese government, via its delegation to the WTO, notified the U.S. government and asked for consultation as a means of WTO dispute settlement over US countervailing and anti-dumping measures against Chinese coated paper.



Our Chinese-speaking readers will note that the English version leaves out a few inconsequential details. My Chinese is a bit sketchy, and my WTO-Chinese is even sketchier, but I think the missing language is “according to Article 4 of the Dispute Settlement Understanding, Article 23 of the 1994 GATT, Article 30 of the Subsidies and Countervailing Measures Agreement, and Article 17 of the AntiDumping Agreement.” No surprises here, I think, and I don’t think it says much about the Chinese strategy. But maybe our more WTO-savvy readers can help out.