U.S. brings WTO case against China on car parts

USTR Schwab says China discriminates against U.S.-made auto parts

WASHINGTON (Market Watch) -- The United States will challenge China's treatment of U.S. auto part imports before the World Trade Organization, said U.S. Trade Representative Susan Schwab on Friday.

This is only the second formal case brought against China in the WTO, and the first that would reach a dispute panel stage.

"China is discouraging automobile manufacturers in China from using imported auto parts in the assembly of vehicles," in part through imposing charges on imported auto parts, Schwab said.

This practice is inconsistent（不一致）with China's WTO obligations, she added.

The European Union and Canada announced that they will join the case on behalf of their auto part manufacturers. The countries will request the WTO to set up a dispute settlement panel.

Efforts to settle the dispute through negotiation have failed to date, although the U.S. is open for more talks, Schwab said.

"China has demonstrated （说明） no willingness to remove its unfair charges," Schwab said. The dispute may be taken up in October as China can block the issue from being discussed at the next meeting of the trade body on Sept. 28. It would take about 18 months for the case to come to a resolution.

"This is all in the spirit of doing business in the World Trading Organization and the multilateral trading system," she said.

The U.S. exported just under $700 million in auto parts to China in 2005 and the market is growing quickly.

China reported Monday that its August trade surplus （贸易顺差）rose to a record $18.8 billion, the fourth straight monthly record.

Greg Robb is a senior reporter for Market Watch in Washington.