Economic dialogue shrouded by friction

Investigation finds US chicken imports hurt Chinese industry

The sixth China-US Strategic and Economic Dialogue will start in Beijing on Wednesday, but the atmosphere before the annual two-day event does not seem very favorable.

The Ministry of Commerce said on Tuesday that a re-investigation into US chicken imports found evidence of dumping and subsidization that hurt Chinese industry.

The findings were in response to a World Trade Organization report in 2012 that claimed China had violated certain rules after it started anti-dumping and countervailing probes into US chicken imports in 2009 and imposed duties in 2010.

The world's top trade body also ruled in an appeal on Monday that the US had "acted inconsistently with" WTO rules with regard to its countervailing and anti-dumping measures on 24 products from China.

The Commerce Ministry hailed the WTO ruling as a "significant victory of China's challenge against US abuse of trade remedy measures through legal channels, which is of great impact".

The dispute could endanger Chinese exports worth up to $7.2 billion a year, it said.

However, the WTO's appellate body was unable to rule on whether a US trade remedy law - enacted in March 2012 and commonly known as GPX Legislation - was consistent with world trade rules.

The US enacted the legislation to allow its Department of Commerce to apply countervailing duties to imports from nonmarket economy countries, including China.

US Trade Representative Michael Froman cited the WTO ruling as China's failure to challenge US law.

The US will "continue to vigorously defend any challenges to the application of our trade remedy laws to ensure that US workers and businesses are not put at a disadvantage by Chinese or other subsidies", Froman said.

Li Hui, a deputy director of the Trade Remedy and Investigation Bureau at the Ministry of Commerce, said that trade friction between the two countries will likely increase.

"Trade disputes will become more complicated in view of the huge trade flows. What's more, there will be more conflicts over the rules and standards covering trade flows," Li said.

China and the US are each other's second-largest trading partner. Sino-US trade rose 7.5 percent year-on-year to $521 billion in 2013.

Li said China's challenge to US domestic laws aims to correct the wrongs of the world trade leader and bring its measures into conformity with the WTO rules. "This is of great meaning to us."

Zhang Yansheng, secretary-general of the Academic Committee of the National Development and Reform Commission, blamed the rising conflicts on the weak economic recovery in the US.

lijiabao@chinadaily.com.cn