With the passage of the five-year grace period for its WTO (World Trade Organization) membership, a privilege that calls for members to abide by fair-trade rules, almost all Chinese industries are less protected by unilaterally-favorable measures-hence have to face reality that competition is inevitably going to heat up from abroad, with the Chinese auto parts and accessories industry being no exception.

A press release from the Office of the U.S. Trade Representative shows that the U.S. has already teamed up with the European union and Canada to request the WTO to organize a task force of experts under the dispute-settlement mechanism-reviewing China's tax levies on imported auto parts of which the WTO has received many complaints from members.

Such collective move against China's duties on import auto parts could disrupt such trade as well as spark anti-protection activities. Should the task force rule against China for violation of WTO regulations, the WTO may penalize China-made products with punitive tariffs. Plus such ruling may trigger new rounds of trade-related lawsuits against Chinese makers in the U.S. and Europe.

The trade friction between China and foreign countries regarding imported auto parts originated from the implementation of the "measures governing imported knockdown parts for finished cars" on April 1, 2005, which stipulates that auto parts imported by enterprises to assemble complete cars must be subject to tariffs for imported autos, usually set at 25%, much higher than tariffs on other auto parts, mostly at 10%.

Source : english.chinabuses.com

Editor : Ida

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Tags: Auto-Parts WTO Protection