By Oliver Hall
China has officially asked the World Trade Organisation to launch an investigation into the legality of the US duties imposed on Chinese-made tyres.
However, the challenge has stumbled at the start, because the US successfully raised objections to the request, according a Reuters news report.
The tyres row is the latest in a series of disputes between the two economic giants to reach the global trade umpire.
At a World Trade Organisation dispute settlement meeting in Geneva on Monday, China requested the formation of an expert panel to examine the legality of “special safeguard” duties on Chinese tyre imports imposed by the Obama administration in September, the Xinhua news agency reported.
The United States successfully raised procedural objections, and China will raise the demand again next month, launching a WTO probe that could take six months or longer to reach a finding, said the report.
Either side then can take issue with the panel finding, eventually pushing the case to a final decision by WTO judges.
“The U.S. government decision to impose the duties lacked a factual basis, and was thus in violation of the relevant WTO rules,” the Xinhua report said, citing a statement by Chinese officials in Geneva on Monday.
“This so-called special safeguard was bowing to pressure from domestic protectionism, and violated the international consensus to avoid protectionist measures against the backdrop of the financial and economic crisis,” said the statement.
Beijing reacted angrily to President Barack Obama’s decision to impose a special 35 percent tariff on Chinese-made tyres after the United Steelworkers union complained that imports had tripled between 2004 and 2008 to about 46 million tyres.
China worries the decision could set a precedent for other such safeguard barriers against its exports and had already indicated it was looking to take the dispute to the WTO.
Washington has said it believes the tyre duties do not violate WTO rules.