From issue no. 356, Feb. 25th 2008
Original article: [Chinese]

Foreign media reported last week that World Trade Organization (WTO) had ruled against China in a case brought by the US, the EU, and Canada over Chinese tariffs on imported car parts. No official announcement concerning the case has been released yet, but according to China's Ministry of Finance, WTO experts have issued an interim ruling to both parties, and China is studying the ruling and preparing to submit its opinions to the WTO.

This has been the first unfavorable ruling China has received since its accession to the WTO seven years ago. After the official ruling is released, China has the right to appeal and state its own opinions. Although it is said that no such appeals have ever won in the WTO, for a dispute settlement mechanism, history is not necessarily to continue.

The news has triggered heated discussion. Many critics say the ruling is politically motivated and unfair to China. Some analysts believe it is partial to the will of multi-national auto giants.

Many in China's car industry hold that China's auto trade policy is consistent with WTO rules. But it is far better that the WTO deals with trade disputes by way of settlement mechanism than by various sides enacting unilateral sanctions or other retaliatory measures.

WTO negotiation and mediation, in accordance with rules that all members abide by, can maintain justice in free trade. As a member of the WTO, China also participates in the drafting of its rules, and thus must respect and act in accordance with them as part of its commitment. If the dispute resolves unfavorably for China, it should not label it the result of conspiracies or meddling by special interests.

Fortuantely, China has shown prudence of late. A spokesperson for the Ministry of Commerce (MOC) has said that China would respect the dispute mediation process, and would not comment on the report before the final judgment was released. We believe this is a rational attitude. Decision-making institutions should not be swayed by personal feelings. Even if it has lost in the preliminary arbitration, China still has ample opportunity to use rule and reason to present its case.