China unveiled data yesterday that showed tire exports to the US actually fell in the first half of this year, rebutting Washington’s accusations it had breached its WTO agreements by flooding the US market.
Both countries moved to allay concerns of a trade war, but the row over Washington’s decision to impose added duties on Chinese-made tires showed no signs of abating as Beijing said the US move was sending the wrong message to the rest of the world.
“We mainly think that it’s an abuse of safeguard measures,” China’s commerce ministry spokesman Yao Jian (姚堅) told a news conference.
The tire duty was the first time Washington has applied special “safeguard” provisions Beijing agreed to before joining the WTO in 2001. The safeguard can be invoked if a surge in imports hurts US manufacturers.
China promptly said it would seek consultations with the US over the duties, a preliminary step toward seeking a WTO ruling on the measures.
“It is sending a wrong message to the world under the current situation that the global financial crisis is still spreading,” Yao said.
Yao objected to US claims that a surge in imports were harming US industry and jobs, saying that Chinese shipments had fallen off and that globalization means barriers to Chinese imports would not guarantee US jobs.
Chinese statistics show that tire exports to the US rose by 2 percent last year, and fell by more than 15 percent in the first half of this year, Yao said.
“Under these circumstances, the conclusion that China’s exports are distorting the US market does not stand,” Yao said, pointing out that US tire manufacturers had not joined the complaint, which was brought by a union.
The United Steelworkers union, which represents workers at many US tire-making plants, has said a tripling of tire imports from China to about 46 million last year from about 15 million in 2004 had cost more than 5,000 US tire worker jobs.
Yao said of the tires exported from China, 68 percent were from foreign-invested plants, including by US firms. Manufacturers have largely shifted production of cheaper tires offshore, producing higher-end tires in the US.
US President Barack Obama said that if the US didn’t enforce the rules that were contained in its trade agreements, “then it’s very hard to have credibility.”
But he added he was sure a trade war could be averted.
“Here’s a situation where China entered into the WTO. It had rules contained in that accession that said that, in fact, if there is a big surge like this, there is a surge breaker,” Obama told CNBC television.
“We have exercised it. I’m not surprised that China’s upset about it. But keep in mind we have a huge economic relationship with China. But I just want to make sure that if we actually have rules written down, they mean something,” he said.
Yao said Beijing did not want to see the case negatively impact Sino-US ties. He said China would reiterate its opposition to protectionism at the upcoming G20 summit of world leaders in the steelmaking city of Pittsburgh, Pennsylvania.
The Ministry of Commerce said on Sunday it would launch its own investigation into chicken parts and automotive imports from the US.
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