1 / 25

China – Auto Parts DS340

China – Auto Parts DS340. Aron, Noor, Zuzana. Summary. China – Auto Parts United States China Argentina, Australia, Japan, Mexico, Chinese Taipei, Thailand. Short Title: Complainant: Respondent: Third Parties :. Key dates. March 30 th , 2006 July 28 th , 2008

garrett-stewart
Download Presentation

China – Auto Parts DS340

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. China – Auto PartsDS340 Aron, Noor, Zuzana

  2. Summary • China – Auto Parts • United States • China • Argentina, Australia, Japan, Mexico, • Chinese Taipei, Thailand • Short Title: • Complainant: • Respondent: • Third Parties:

  3. Key dates • March 30th, 2006 • July 28th, 2008 • December 15th, 2008 • Request for consultations: • Panel report received: • Appellate body report circulated:

  4. What was the issue? • China’s taxes discourage its manufacturers from using imported auto parts • -> Ignoring WTO commitments limiting tariffs to rates significantly below tariffs on finished cars • => discrimination against US and third country auto parts

  5. Closer look • Better access to China's auto market = key issue in China's accession to the WTO • -> China agreed • Regulations on imported auto parts that did not meet local requirements • Registration with China's Customs Administration • if number or value of imported > specified thresholds => 25% tax

  6. DS 340 case filed Data Source IBISWorld, 2014

  7. US Interests in Chinese Auto Market a. b. Data Source IBISWorld, 2014

  8. Us Employment, Auto Parts Industry DATA SOURCE: U.S. Census Bureau, Office of Transportation and Machinery, U.S. Department of Commerce

  9. Growth in Chinese Auto Parts Industry Data Source IBISWorld, 2014

  10. Chinese Employment, Auto Parts Industry Data Source IBISWorld, 2014

  11. National and International Interests Data Source IBISWorld, 2014

  12. Position – United States (Complainant) • Asserted that measures identified on behalf of China allegedly penalize manufacturers for using imported auto parts • China bound its tariffs for parts at rates lower than its tariffs for completed vehicles • China need to assess a charge on imported auto parts equal to tariff on completed vehicles • China impaired intentionally or unintentionally the benefits accumulating to the US

  13. United States • Conflicting with: • Article 2 of the TRIMS agreement • Articles II (including paragraph 1) and III (including paragraphs 2, 4, 5) of the GATT (1994) • Article 3 (including paragraphs 1 and 1) of the SCM agreement • The Protocol of Accession (WT/L/432) (including Parts I.1.2 and I.7.3, and paragraphs 93 and 203 of the Working Party Report

  14. Position – Respondent (China) • Criteria for determining whether imported auto parts should be characterized as complete • Vehicles – criteria for determining auto parts characterized as complete motor vehicles • Misguided interpretation of Article II (GATT 1994) • WTO members possess right to interpret Harmonized System (Cho 2008)

  15. Position – Canada • Contends that various charges on vehicles manufactured in China depending on the domestic content of the automobile parts used in the manufacture • China provides domestic manufacturers an advantage if they use domestic parts • Impact on foreign investments because they yield an advantage to enterprises

  16. Inconsistent with: • The Protocol of Accession (WT/L/432) (including Parts I.1.2 and I.7.3, and paras. 93 and 203 of the Working Party Report). • Articles II (including para. 1) and III (including paras. 2, 4 and 5) of the GATT 1994. • Article 2 of the TRIMs Agreement. • Article 2 of the Agreement on Rules of Origin, • specifically paras. (b), (c) and (d). • Article 3 of the SCM Agreement

  17. Position - European Community • Argued that under the measures identified, imported automobile parts that are used in the manufacture of vehicles for sale in China are subject to charges equal to the tariffs for complete vehicles, if they are imported in excess of certain thresholds

  18. Inconsistent with • Articles II:1(a), II:1(b), III:2, III:4, III:5 of the GATT 1994, as well as with the principles contained in Article III:1 • Articles 2.1 and 2.2 of the TRIMs Agreement in conjunction with paragraphs 1(a) and 2(a) of the Illustrative List annexed to the Agreement • Article 3 of the SCM Agreement • China's obligations under its Access Protocol, in particular Part I, para. 7.3 of the Accession Protocol, and in para. 203 of the Working Party Report on the Accession of China (WP Report) in conjunction with Part I, para. 1.2 of the Accession Protocol, and para. 342 of the WP Report

  19. Verdict (aka Decision) • Panel and Appellate Body proceedings: • The United States, European Communities, and Canada solicited the establishment of a panel for review • Timeline • In October 2006, the WTO established a single panel to assess the case against China’s measures affecting the imports of automobile parts

  20. Timeline continued • As Japan, Mexico, Japan, Argentina, Australia, Mexico, Brazil, Thailand and Chinese Taipei reserved their third party rights, the complainants sought the Director-General to determine the consistency of the panel • The panel discovery was extended due to the convolution of the issues presented • The big day: July 18, 2008 • Conclusion – “The panel recommended that the DSB request China to bring these inconsistent measures into conformity with its obligations under the GATT 1994 and the WTO Agreement.” • Essentially, the cases brought against China by the US, European Communities, and Canada were given validity • China’s reaction: China advised that it would appeal to the Appellate Body; however, the findings of the WTO panel were upheld

  21. Implementation • China confirms that it will comply with recommendations and ruling, but asks for grace period • After a two week period of negotiations the US and China agree implementation will begin September 1st, 2009 • As promised on September 1st, 2009: • China declared conformity with DSB recommendations and rulings • Source: www.WTO.org

  22. Observations for Int. Trading System Due to the DSB recommendation: • US and Chinese trade counterparts have come one step closerin shaping trade • Auto part exporters in the US and foreign markets stand to gain an increased market share in China

  23. proposal • Team #3 agrees with verdict, BUT => International trading system needs to remain observant and transparent http://live.wsj.com/video/a-profitable-trade-illicitly-shipping-bmws-to-china/42471D12-7B10-45A4-8A8D-A19CA1B1DC06.html#!42471D12-7B10-45A4-8A8D-A19CA1B1DC06

  24. Thank you ! Aron, noor, zuzana

  25. Sources • IBISWorld. "INDUSTRY MARKET RESEARCH, CHINA INDUSTRY REPORTS, AUTO PARTS MANUFACTURING." IBISWorld. N.p., n.d. Web. 21 Feb. 2014. • U.S. Census Bureau Prepared by: Office of Transportation and Machinery, U.S. Department of Commerce. 2013. Raw data. Http://trade.gov/mas/manufacturing/OAAI/build/groups/public/@tg_oaai/documents/webcontent/tg_oaai_003765.pdf, n.p. • McKinsey & Company GOG Analysis; McKinsey Insights China. Rep. N.p., n.d. Web. 21 Feb. 2014. <http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCkQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FAutomotive_industry_in_China&ei=EtQHU-LyEqmH1AHnhYGwAg&usg=AFQjCNHdHy9WgUVikLggbUDfHB6buBEjbg&sig2=Vgxhv7EzGV5o4B56qcYvTg&bvm=bv.61725948,d.dmQ • WTO. "DISPUTE SETTLEMENT: DISPUTE DS340 China — Measures Affecting Imports of Automobile Parts." Https://www.wto.org. N.p., n.d. Web. 21 Feb. 2014. <https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds340_e.htm

More Related