WTO rules against China over import duties on car parts

WTO rules against China over import duties on car parts
Feb 14, 2008 21:22
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	According to the news, WTO ruled that China broke WTO rules to impose heavy import duties on car parts. WTO thought that China didn't keep its promises when it joined WTO in 2001. It is said that China imposes 25 percent import duties on finished cars and 10 percent on car parts. WTO said that the high import duties over car parts made fewer Chinese domestic car makers use imported car parts and this would reduce the employment opportunities in US, Canada and European countries. Actually, US and other European countries once appealed to WTO over this matter in 2006. They complained that the high import duties on car parts forced Sino-foreign joint ventures and Chinese car makers to use car parts made by China. On the other hand, those foreign car parts makers moved to China to avoid the high tax. In this way, many employers lost their jobs in their own countries. Chinese side said that the purpose to impose high import tax on car parts is to avoid those importers escaping tax. Many Chinese car makers import car parts abroad and then make finished cars to make money. Actually, those assembled cars are cheaper than those imported finished cars. In this way, those car makers escaped 15 percent tariff tax. Some people said that WTO just favoured those developed countries on this issue and it was unfair. What do you think?

Feb 14, 2008 21:22

JIMMYB
Points:
Join Date: Feb 7, 2007
Status: offline

According to the news, WTO ruled that China broke WTO rules to impose heavy import duties on car parts. WTO thought that China didn't keep its promises when it joined WTO in 2001. It is said that China imposes 25 percent import duties on finished cars and 10 percent on car parts.

WTO said that the high import duties over car parts made fewer Chinese domestic car makers use imported car parts and this would reduce the employment opportunities in US, Canada and European countries. Actually, US and other European countries once appealed to WTO over this matter in 2006. They complained that the high import duties on car parts forced Sino-foreign joint ventures and Chinese car makers to use car parts made by China. On the other hand, those foreign car parts makers moved to China to avoid the high tax. In this way, many employers lost their jobs in their own countries.

Chinese side said that the purpose to impose high import tax on car parts is to avoid those importers escaping tax. Many Chinese car makers import car parts abroad and then make finished cars to make money. Actually, those assembled cars are cheaper than those imported finished cars. In this way, those car makers escaped 15 percent tariff tax.

Some people said that WTO just favoured those developed countries on this issue and it was unfair. What do you think?

Feb 20, 2008 03:50	#1
JIMMYB Points: Join Date: Feb 7, 2007 Status: Offline	According to the news, China might appeal to WTO. It would be better if China won the case.

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