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Five Years After WTO, Trade Disputes Increase
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Five years after its entry into the World Trade Organization (WTO), China's rapidly increasing trade volume has created growth in another area as well: the amount of trade disputes it's facing.


The latest report from the WTO says China is the world's most frequent subject of anti-dumping inquiries. It is now on the receiving end of one third of the world's trade disputes, up from 15 percent in 2001 when it first joined the organization.


Despite a global decline in trade investigations, China was investigated 32 times in the first half of 2006, nine more times than in the same period last year, the report said.


Earlier this month, the United States made a number of formal complaints to the WTO about China's policies towards intellectual property rights and trade. Meanwhile, the European Union imposed a two-year, 16.5 percent anti-dumping tariff on China-made leather shoes exported from this October.


These disputes, said Zhang Xiangchen, director of the department of WTO affairs under the Ministry of Commerce, are "the result of the dramatic development of the country's foreign trade."


"China is taking a larger and larger proportion of the world's business," he said. "Trade disputes are unavoidable in this process."


China ranks third in the world in import and export volume. It has a 7.7 percent share in the world market, compared with 3.9 percent five years ago.


The target commodities of anti-dumping complaints are mainly in the light industry, chemicals, and textiles. Bicycle and bicycle parts makers have been investigated as many as 18 times for dumping charges, and shoe makers were investigated for anti-dumping 16 times, according to statistics from the Ministry of Commerce.


While developed regions such as the United States, European Union, and Japan have kept up pressure on China, the country is also grappling with restrictions from the developing world. Developing countries initiated 60 percent of the total anti-dumping charges.


Anti-dumping duties have hit profits and workers of mainly labour-intensive industries. An official from the Ministry of Commerce said previously that the recent tariffs on shoes put 70,000 workers in southern China out of business.


Despite the increasing number of cases, Long Yongtu, the former chief WTO negotiator, does not see trade disputes as a huge factor in trade deals. "Foreign trade increases by nearly 30 percent per year, and products hit by anti-dumping charges only amount to five percent of the total export products," he said.


The Chinese Government and experts encourage enterprises to face disputes actively and protect their interests by using "weapons of the WTO," meaning the rules and regulations to protect against unfair anti-dumping charges.


"The more obstacles we clear out, the wider our business scope will be," said Pu Lingchen, the lawyer who helped Chinese enterprises handle over 40 anti-dumping cases and overturned the EU's anti-dumping charges against China-made lighters in 2003.


In a recent case involving shoe-makers, Ao Kang Group, one of the biggest shoes-makers in China, decided to file suit against the anti-dumping duty in the EU court.


Meanwhile, China has also initiated 110 anti-dumping investigations and one safeguard measure, which made up a total trade volume of US$9 billion during the last five years.


"The amount of countervailing cases started by China ranks second in the world, and the quality of investigation has also been recognized by people worldwide," said Wang Shouwen, director of the Bureau of Fair Trade for Imports and Exports, a government body in charge of trade disputes under the Ministry of Commerce.


The continuous opening of the domestic market and large-scale increase of imports are the main reason for these measures, according to Wang.


(China Daily December 20, 2006)


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