WTO steel tariff panel on horizon
( 2002-06-07 09:42 ) (1 )

The World Trade Organization (WTO) is meeting in Geneva on Friday to discuss whether to set up a panel to examine the legality of United States steel tariffs following a Chinese complaint.

This is the first request that China filed with the WTO's dispute settlement body after its entry into the trade organization last December.

But analysts are afraid the US will use its right under WTO dispute settlement rules to block China's request, as it did earlier to the European Union, Japan and South Korea.

It would take an appeal to get the WTO to establish a panel for China, said Ma Yu, a senior researcher with the Chinese Academy of International Trade and Economic Co-operation.

Ma said a panel is very important to get the issue resolved and expects the Chinese Government will not hesitate to make a second request.

Citizens from interested countries would be barred from the panel and the WTO is responsible for ensuring that panelists are experts in the iron and steel industries of China and the US, law, WTO rules and international trade practices, he said.

Tokyo and Seoul have told the dispute settlement body that they will lodge a second request on June 14. According to WTO rules, a second request cannot be blocked.

A panel of three experts was set up on Monday pursuant to the EU's second request.

Complaints by the EU, Japan, South Korea and China focus on the US introduction on March 20 of a three-year programme of up to 30 per cent tariffs on some imported steel.

Of the 6 million tons of steel that the EU exports to the US every year, 4 million tons, or two-thirds, are "adversely affected" by the tariffs, the EU has said.

The steel has a trade value of 2.5 billion euros (US$2.3 billion), according to EU figures.

Although China exports a relatively small amount of steel to the US, the case is very important to the country, said analysts.

The US steel tariffs may divert large amounts of steel exports into the China market, said Lei Da, a senior economist with the Renmin University of China.

China could learn from the strategies and detailed measures adopted by the US and the EU to take advantage of the WTO's dispute settlement body and protect their national interests in international trade, he said.

Experts said the procedure of the WTO dispute settlement body will take several years to complete and the damage will have already been done then even if the US loses the case.

Urging the WTO to be more efficient and step up the process, the experts pinned hopes on the Doha round of WTO talks to improve the mechanism of the dispute settlement body.