TWN Info Service on WTO and Trade Issues (Jul18/05)
9 July 2018
Third World Network

China urges members to join fight against US unilateralism
Published in SUNS #8716 dated 6 July 2018

Geneva, 5 Jul (D. Ravi Kanth) - China urged members of the World Trade Organization on Tuesday (3 July) "to join" its efforts "in firmly fighting against the United States" over its flagrant violation of global trade rules, negotiators told SUNS.

Inveighing against Washington's escalating unilateral measures under the US section 232 provisions and the punitive duties on Chinese products under Section 301 provisions, China said: "It is willing to continue to take concrete actions to safeguard the authority of WTO."

"We would also call on the whole Membership [of the WTO] to join us in firmly fighting against unilateralism and protectionism," a Chinese official told his counterparts at a meeting of the WTO's Council for Trade in Goods (CTG) on Tuesday (3 July).

"The acts of the United States are a severe violation of the fundamental principles of the WTO, which would seriously damage the multilateral trading system and destruct the global trade order," the Chinese official said, according to several participants present at the meeting.

"History tells us that if the unilateralism is unrestrained, it would bring destruction to the world economy and all members, especially the developing country members," China said.

Mocking the US about its sudden unilateral actions, China said "at this moment, we cannot be certain who and what product would be the next target of the US unilateralism."

"But we can be sure that if the WTO members are not able to fight and control the current unilateralism and protectionism, the whole WTO membership including the United States would be the victims," China maintained.

Urging the US to "respect both facts and rules," China said it would take " all necessary measures to fight against the unilateral acts and defend its legitimate rights and interests under the multilateral trading system."

Many developing countries and several developed countries joined China in opposing the US measures on steel and aluminum as well as the proposed measures on automobiles, arguing that these have severely undermined the multilateral trading system.

In a scathing statement, China dismissed the US claims that the punitive duties imposed on steel and aluminum and the proposed duties on automobile products are for safeguarding US national security.

"The US section 232 measures on products that are "civilian" in nature are actually adopted to protect the commercial interests of its domestic interests."

"Therefore, these are purely trade protectionist measures under the disguise of "national security" and will seriously undermine the multilateral trading system," a Chinese official told the meeting.

China and six other countries - the European Union, India, Canada, Mexico, Norway, and the Russian Federation - have now invoked dispute settlement proceedings against the US on additional duties of 25% on steel and 10% on aluminum under Section 232 provisions of US trade law.

The Chinese official citied statements made by Mr Peter Navarro, the Director of the US White House National Trade Council, who had said that "(a)ny country , ... which [is] exempted from the tariffs, will have a quota and other restrictions."

China asked the US to clarify whether the statement is true and whether the US has now reached any agreements on quota or any form of "voluntary export restriction" with the members who are exempt from the section 232 measures.

Expressing "grave concerns" over the Section 232 investigations on imports of automobiles on 23 May, China said "automobiles and parts and components thereof imported by the US are mostly products for civilian purposes and [by] no means involve "national security"."

China said "the frequent initiations by the United States of investigations under section 232 are obviously protectionist under the disguise of "national security", and will significantly distort the global market and value chain."

Commenting on the US Trade Representative Ambassador Robert Lighthizer's decision to impose an additional duty of 25 percent on US$50 billion worth of Chinese imports under so-called Section 301 provisions of the US Trade Act, China said the US measures "are purely unilateral actions which are inherently incompatible with the multilateral trading system."

The US will collect additional duties on US$34 billion of Chinese goods from Friday (6 July) and review the rest of the $16 billion through public notice and comment process.

The US has also threatened to impose additional duties on another US$200 billion worth of products from China.

The US, however, objected to China's statement on US Section 301, arguing that it is not part of the CTG agenda, said a participant after the meeting.

On US Section 232 measures on steel and aluminum, the US said the issue is already under dispute settlement proceedings.

But more than 40 countries chided the US for imposing additional duties on steel and aluminum and Washington's move to impose duties on automobiles and auto parts.

Japan and Russia had included the Section 232 measures in the CTG agenda.

The EU said the proposed measures to restrict the import of cars, car parts, and light trucks on grounds of national security provisions are unjustifiable as there is no economic threat to the US automobile industries.

Meanwhile, in a statement issued at the German Bundestag on Wednesday (4 July), German Chancellor Angela Merkel has warned the Trump administration that hitting auto imports with new tariffs would have dire consequences. "We now have tariffs on aluminum and steel and we have a discussion that is far more serious," she said, according to the CNN.

"This is taking on the contours of a trade conflict - I don't want to use words that go any further. It's worth every effort to try and defuse this so that this conflict does not become a war," she said.

"President Donald Trump has threatened to place a 20% tariff on all European cars coming to the United States if the European Union doesn't remove its own trade barriers," according to Washington Trade Daily of 5 July.

"Targeting cars would dramatically raise the stakes in the spat between Europe and its biggest trading partner. EU-US trade in goods and services is worth more than $1.2 trillion each year," the WTD reported.

In short, it is a defining moment for the WTO members whether they can all join hands against the US to curb its unilateral actions or allow Washington to assume the dangerous face of what the world witnessed in the run-up to the Second World War following the unilateral actions of a former German chancellor.