GENEVA: China has declared victory in a precedent-setting case that limits the ability of its trading partners to set punitive duties on the world's biggest exporter. China had brought the case before the World Trade Organization in September 2008 to challenge US duties set on steel pipes, woven sacks and some off-road tires. Last October, a WTO panel rejected almost all of China's claims. But China asked WTO appeals judges to take another look. They did – and Friday, in a big reversal, found largely in China's favor. China's mission to the WTO in Geneva said it welcomes a decision that “strikes at the heart of how the United States has applied countervailing duties to Chinese products, not only in the four investigations at issue in this dispute but also in the many investigations that have come since.” The appeals judges decided that the US had illegally imposed two classes of punitive duties of up to 20 percent on Chinese exports in 2007. They found that the US could not apply both anti-dumping and anti-subsidy duties on the pipes, sacks and tires. “The WTO has conclusively established that the United States acts unlawfully in the methods by which it calculates and imposes countervailing duties on imports from China,” the Chinese mission said in a statement. The first of those duties is aimed at preventing a country from selling goods below cost; the second is intended to compensate for government aid to industry. The decision is a blow not only to the US but also to the European Union and other trading partners with China because it limits their ability to impose punitive duties on Chinese exports. It also gives more momentum to China at a time when it is fighting off disputes at the WTO brought by trading partners who complain about a state-subsidized manufacturer that dumps goods in foreign countries below cost to saturate markets. Last year, China overtook Germany to become the world's largest exporter, and it also now has the world's second-biggest economy. Last year it had $1.6 trillion of exports and a trade surplus of $184.5 billion.
