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First WTO Complaint by China Filed

China Thursday applied to the World Trade Organization (WTO) to arrange talks with the United States on US tariffs on steel imports, according to the Ministry of Foreign Trade and Economic Co-operation (MOFTEC).

This is the first Chinese complaint to the WTO since becoming a member of the world trade body last December.

"China demands that the US fix the place and the date of the talks as soon as possible," said MOFTEC in a statement.

China's steel exports to the US make up too small a proportion of the country's total imports of this product to damage US industries, it said.

MOFTEC demanded that the US take this fact into full account when tackling the issue.

"China and the US are important trading partners and China hopes the issue will be properly and quickly resolved through bilateral talks so as to avoid damage to Sino-US trade ties," it said.

MOFTEC also urged the US Government to be responsible and take into consideration the great harm its action would do to international trade order.

US President George W. Bush slapped tariffs of up to 30 percent on several types of imported steel in an effort to help the ailing US industry on March 5.

The nations hardest hit by the tariffs include Japan, the European Union, the Republic of Korea, China, Ukraine, Brazil and Russia.

The Chinese Government immediately voiced its "strong displeasure" with the US decision after the US president's announcement of the tariffs.

"The US decision flouts WTO rules and will incur great losses on Chinese steel exporters," said MOFTEC on March 6.

"We retain all of our rights within the WTO framework," it said.

China is not alone in its pronounced anger against US steel tariffs and threats to take the dispute to the WTO.

Other US trade partners also reacted angrily to the US decision, with the European Union, Japan and the Republic of Korea warning it could trigger a new round of global trade protectionism while threatening possible lawsuits at the WTO.

The EU announced Thursday that it is to talk with the US in Geneva next Tuesday on the establishment of a WTO disputes panel to consider the US tariffs.

The EU Commission said it is considering its own duties on steel to protect it from a surge of imports of steel that cannot get into the US market.

Katsusada Hirose, Japanese vice-minister of economy, trade and industry, said Tuesday that Japan reserves "every possible option, including a petition to the WTO and retaliatory measures."

Japan has secured a chance to hold talks with the US in Washington late Thursday over the US action which will take effect next Wednesday.

Tokyo is looking at compensation under the first step of a procedure laid down in the WTO's agreement on safeguards.

If the talks fail, Japan could be allowed to withdraw concessions granted to the US.

Hirose said the Japanese side might ask for compensation in the form of lower US tariffs on other imported goods from Japan if it finds the US explanation of its decision unconvincing.

The tariffs exempt countries that have signed free trade agreements with the US - Canada, Israel, Jordan and Mexico - and developing countries with only limited steel exports to the US.

Australia has negotiated an exemption to most of the tariffs, with Prime Minister John Howard saying on Monday that 85 percent of Australian steel exports to the United States would not be affected by the new tariffs.

(China Daily March 15, 2002)


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Ministry of Foreign Trade and Economic Cooperation
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