China tells U.S. to axe anti-subsidy probe on tires

Reuters News
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Posted: Dec 21, 2011 5:48 AM
China tells U.S. to axe anti-subsidy probe on tires

BEIJING (Reuters) - China urged the United States on Wednesday to halt anti-subsidy investigations into Chinese tires and other products since Washington does not recognize China as a market economy.

The call by China's Commerce Ministry was issued after the U.S. Court of Appeals for the Federal Circuit dismissed an anti-subsidy lawsuit submitted by the U.S. Department of Commerce that targeted tires imported from China.

"For many years, the United States has been launching anti-subsidy investigations against China which go against World Trade Organisation rules and are not supported by U.S. laws," the Commerce Ministry said.

"We hope the United States can correct its mistakes as soon as possible and not launch an anti-subsidy probe against China if it does not recognize China's market economy status."

China is deemed a "non-market" economy under trade terms negotiated in 2001 as part of its entry into the World Trade Organisation.

That status has troubled Beijing, which says Chinese exporters are unfairly penalized when trading partners pursue anti-subsidy or anti-dumping cases against them.

To build an anti-subsidy or anti-dumping case against China, a country can substitute Chinese prices with those of another nation, and one where manufacturing costs are higher, in order to provide supporting evidence for the case.

China says this is unfair because it hinders its export sector, a point reiterated by the Commerce Ministry on Wednesday.

"The abuse of trade measures is a typical behavior of protectionism," the ministry said.

Ties between the United States and China, the world's two biggest economies, have been fraught with a growing list of trade and investment disputes as rising global economic uncertainty raises tension.

(Reporting by Aileen Wang and Koh Gui Qing; Editing by Ken Wills and Ron Popeski)