WTO Launches Tire Special Safeguard Dispute Resolution First Case

On January 19, at the World Trade Organization (WTO) Dispute Settlement Body meeting, the China-US Tire Special Insurance Investigation Experts Group was established. The WTO will formally launch the investigation of China's special tire insurance program for the US that is known as the "First Case of Trade Protection." program. Experts said that the settlement of special safeguard disputes is the first time for China and the WTO. The results are still difficult to predict. However, for China, its prevention and demonstration significance is greater than the results of the special safeguard case itself.

In December 2009, China and the United States made a request to the WTO Dispute Settlement Body for the establishment of an expert group in the absence of a consultation on the tire special security case. However, the United States prevented the establishment of the expert group in accordance with relevant procedures. At the meeting of the WTO Dispute Settlement Body held on January 19, the Chinese side again demanded the establishment of an expert group. According to the WTO rules, the United States has no right to stop again, so the expert group was established automatically.

According to the provisions of the WTO Dispute Settlement Mechanism, the expert group is generally composed of 3 experts, and their appointment usually takes 45 days. After that, the expert group will enter the review stage of the dispute case, that is, to hear both parties' statements, investigate and analyze the facts, and generally submit the expert group report within 6 months. After that, all parties involved have the opportunity to appeal. At the same time, all parties to the dispute will retain the opportunity to stop at this point through the use of good offices.

“The Ministry of Commerce will issue an industry assessment analysis after the occurrence of the special security case, including changes in the amount of exports of each enterprise to the United States, changes in employment, and the impact on domestic enterprises.” An insider of the Public Relations Department of China Rubber Industry Association The reporter told reporters that the China Rubber Industry Association is currently actively cooperating with this evaluation work and is in contact with the company to obtain the latest information.

"China's appeal is mainly directed at the procedural issues in the United States when it initiates the special security case. If the W TO's findings indicate that the United States has deficiencies in procedures, it will withdraw US special safeguard measures." W TO Institute, University of International Business and Economics Tu Xinquan, the deputy dean, said in an interview with reporters. “But the results still have to wait and see, because this is after all the first case of WTO’s establishment of special safeguard dispute resolution for more than 60 years. There is no case that can be used for reference. How to decide is difficult to predict. ”

In September 2009, the U.S. government announced the implementation of a three-year punitive tariff on imported cars and light truck tires from China, that is, on the basis of the original tariff of 4%, and 35% in three years respectively.

“The latest data shows that some domestic large-scale tire companies’ exports in the fourth quarter of last year decreased by 75% year-on-year. There are also some tire companies involved that have affected foreign exchange earnings by more than US$15 million.” According to the insiders of the Rubber Industry Association mentioned above, at the same time, The negative impact of the U.S. market has also begun to show.

“The US tire market has recently begun to show price increases. Major tire dealers have raised prices.” The above sources pointed out that such as Continental tires from February 1, 2010, the price of truck tires in the United States rose by 8%; Michelin from Starting from February 1, 2010, U.S. light and medium-sized truck tires and bulldozers will change their tyre prices in an all-round way; Finland’s Nokia Tire Corp. will increase the price of passenger tires in North America from January 11th, 2010, by about 3%. 6% and so on. In addition, some tire companies have closed some of their North American factories. “These all show that the tire protection case has also had a negative impact on the U.S. corporate factories, affecting the direct consumer and related employment in the U.S. tire industry.” The above sources said.

In addition, following the United States, India, Brazil, and Argentina have all initiated trade remedy measures against the Chinese tire industry. It is understood that as of now, China’s tires have been subjected to investigations initiated by Venezuela, Australia, Brazil, Peru, Egypt, Turkey, South Africa, Mexico, the United States, Argentina, India, and other countries. The products involved are tires from cars and motorcycles. Low-value-added products spread to high value-added products such as heavy-duty radial tires and engineering tires.

“It can be said that the damage caused by the tire special security case has been irreparable. China’s WT O initiated a special trade case for tire protection. Its preventive significance and demonstration significance are greater than the results of the special safeguard case itself.” Mei Xinyu, Research Fellow at the Ministry of Commerce In an interview, the reporter stated that the WT O expert group investigation process will take a long time, and there is no need to expect much from the survey results. According to the three-year period of the tires' special guarantee, even if the survey results are beneficial to China, the three-year cycle may be faster than the announcement of results.

Tu Xinquan also stated that the main purpose of China’s lawsuit against the United States should be to form pressure on the United States and express China’s attitude of firmly resisting trade protection. “The investigation of special safeguard disputes is the first of its kind for China and WT O. The Chinese government and enterprises can familiarize themselves with the WTO dispute settlement rules, accumulate experience, and respond to similar cases in the future. In addition, China’s counterattack. It can also play a preventive and warning role for other countries. If China wins, it will be based on countervailing the United States and other countries to once again adopt special safeguards against China and safeguard China’s rights and interests.” Tu Xinquan said.

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