From Financial Times:
China on Friday suffered its first legal defeat since joining the World Trade Organisation seven years ago, after the global trade body ruled against Beijing’s import tariffs for car parts.
A WTO dispute panel confirmed an interim judgment made in February, which upheld complaints by the US, European Union and Canada that China violated fair trade rules by discriminating against imported parts. Responding to the verdict, Peter Power, EU trade spokesman, said: “We hope China will act swiftly to remove discrimination and create a level playing field in the automotive sector in China.” And Susan Schwab, US trade representative, added: “The panel report leaves no doubt that China’s discriminatory treatment of US auto parts has no place in the WTO system.”
China is expected to appeal, postponing any definitive decision until later this year. However, if the appeal goes against it, Beijing will have to remove the offending measures or face swingeing trade sanctions. In 2006 the panel began investigating China’s surcharge on imported car parts, imposed if they made up more than a specified portion of a finished vehicle.