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U.S. broke tariff law, WTO rules

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By Reuters
Monday, July 14, 2014, 11:14 p.m.

World Trade Organization judges said on Monday the United States broke its rules in imposing hefty duties on Chinese steel products, solar panels and a range of other goods that Washington argues enjoyed government subsidies.

In a similar case involving American methods in deciding when foreign imports are unfairly priced, another WTO panel ruled in support of some claims by India against tariffs on steel exports from three of its major firms.

In the $7.2 billion Chinese case, the panel found that Washington had overstepped the mark in justifying the so-called countervailing duties it imposed as a response to alleged subsidies to exporting firms by China's government.

Under the 1964 Marrakesh accords, which set up the WTO, those duties can be levied only when there is clear evidence that state-owned or partially state-owned enterprises passing on the subsidies are “public bodies.”

The panel found that Washington had produced insufficient evidence for that, and was at fault in its calculations of the value of the subsidies to Chinese firms producing items such as kitchen shelving, grass cutters and citric acid.

Trade diplomats said the two cases, under scrutiny for nearly two years by separate panels, reflected widespread concern in the 160-member WTO about what many view as illegal U.S. protection of its producers.

The ruling, which gave the United States some comfort in rejecting some aspects of the Chinese complaint, was welcomed in a statement from China's Ministry of Commerce distributed by Beijing's trade mission in Geneva.

“China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises,” the statement said.

“With respect to the other findings in the panel report, the Administration is carefully evaluating its options, and will take all appropriate steps to ensure that U.S. remedies against unfair subsidies remain strong and effective,” said U.S. Trade Representitive Michael Froman.

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