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The World Trade Organization (WTO) decided on Thursday to establish an expert panel to investigate whether a Chinese auto parts import measure violates WTO trade rules or not.

 

At a meeting of the WTO's Dispute Settlement Body (DSB), the European Union, the United States and Canada again made a joint request for the expert panel. Their previous request, made last month, was blocked by China.

 

As China, like any other WTO member, can only block a panel request once, the DSB automatically approved the setting up of the panel on Thursday.

 

China considers car parts as a whole vehicle if they account for 60 percent or more of the value of a final vehicle, and it charges a higher tariff on them.

 

It insists that the measure is meant to keep "criminal elements" from exploiting the difference between tariff rates for entire automobiles and auto parts, and to protect consumers' interests.

 

But the EU, US and Canada complain that the tariff hinders foreign auto makers and car parts suppliers in China, and breaks WTO rules.

 

The three took the rare step earlier this year of jointly bringing the case to the WTO, seeking a solution to the dispute through consultations within the WTO framework.

 

On Sept. 15, the three partners formally requested the DSB to establish an expert panel on China's import measure, the second step of the WTO's dispute settlement process.

 

They claimed that they had "tried to negotiate with China on a solution but found China's stance left them with no choice but to proceed with a WTO case."

 

China's Ministry of Commerce expressed regret over the action. "China has showed great sincerity in clarifying the facts and its views during consultations with the EU and the United States," a spokesman said.

 

This was the first time that China faces a litigation at the WTO, which it joined in 2001.

 

According to WTO dispute settlement rules, the expert panel, composed of three to five independent experts, will be in place in 45 days after its approval. It usually takes six months for the panel to finish its first report on a dispute.

 

(Xinhua News Agency October 27, 2006)