US unilateral trade actions violate WTO principles: Expert

The United States' unilateral actions under the Section 301 Investigation have violated the World Trade Organization's fundamental principles of multilateralism, an expert said on Saturday.

Xiao Jin, partner at King & Wood Mallesons, a Beijing-headquartered multinational law firm, said that the measures taken by the US will lead to a situation where normal trade disputes are solved by unilateral actions rather than multilateral procedures.

"The US unilateral actions will disrupt the multilateral trading system and increase the uncertainty in the global trading environment. It should be condemned by the international community," he added.

According to Xiao, the US unilateral actions under its domestic Section 301 Investigation violate WTO's rules and principles in three aspects.

First, it is a violation of the most-favored-nation treatment principle, as the US announced additional tariffs targeting only China but not any other countries. Second, the announced 25 percent tariffs on Chinese imports exceed the maximum rates the US committed to under the WTO. Third, under the exclusive jurisdiction of the WTO dispute settlement system, any attempt to seek redress must be made in the institutional framework of the WTO only. The WTO rules do not permit the US to unilaterally claim China violates its WTO obligations and impose additional tariffs.

Xiao said that the US has been vetoing the appointment of new members to the WTO's Appellate Body since last year, which will destroy the dispute settlement mechanism in the near future and will damage the multilateral dispute settlement mechanism.

The statistics offered by Xiao show that there have been 137 cases against the US at the WTO, accounting for about a quarter of the total cases handled by the WTO. Of the 80 cases for which the WTO has issued rulings, the US lost 69 of them, being held to have violated the WTO rules. This number is far more than that of China.

"The Chinese government has always firmly defended the multilateral system," Xiao added. "China will always seek redress via WTO procedures for solving trade disputes. This time, China was forced to take some defensive actions to fight against the US's additional tariffs. At the same time, China also has requested consultations with the US under the WTO over those additional tariffs imposed as a result of the Section 301 Investigation. This again shows China's position in supporting the WTO and safeguarding the multilateral system."