US takes two China trade cases to WTO

Trade tensions between the United States and China have ratcheted up another notch, as Washington called on the WTO to probe unfair Chinese trade practices.

The United States asked the World Trade Organization to investigate China's allegedly unfair treatment of US steel and electronic payment providers, the first step toward sanctions.

"We are concerned that China is breaking its trade commitments to the United States and other WTO partners," US trade representative Ron Kirk said in a statement.

Amid mounting US anger about China's trade policies, Kirk's office said it would ask the WTO for "consultations" about Beijing's policies, a step that could lead to retaliatory measures.

US authorities said China slaps unfair duties on US electrical steel and has not opened up its market in electronic payments.

Beijing claims that US steel had been dumped onto the Chinese market and is subsidized.

A Chinese bank worker counts US dollar bills alongside stacks of 100-yuan notes in central China's Anhui province.

The announcement comes on the eve of what is expected to be an acrimonious appearance by Treasury Secretary Timothy Geithner before the US Congress.

Facing November elections shaped by voter anger at the sour economy, US lawmakers will grill Geithner on what they charge are China's unfair policies.

Key Senate and House of Representatives committees are weighing bills to impose retaliatory measures against Chinese goods amid accusations that Beijing keeps its currency -- and thereby its exports -- artificially cheap.

The White House's Democratic allies have expressed frustration with both China and US President Barack Obama's administration, and warned that lawmakers may be forced to act unless Washington wrings some concessions from Beijing.

The administration will hope Wednesday's announcement takes some of the sting out of what could become a damaging trade war between two of the world's largest economies.

"These two cases are critical steps forward in our effort to enforce our market access rights in China," said Democratic Senator Max Baucus.

Kirk meanwhile echoed complaints commonly heard on Capitol Hill.

"The duties imposed by China have raised the price of hundreds of millions of dollars' worth of American steel headed into China, with the practical effect of reducing or blocking exports of our steel to that country. China must not abuse WTO procedures to protect its market," said Kirk.

"This case makes clear that the United States will not permit China to threaten American steelworkers? jobs by using anti-dumping and countervailing duty proceedings to harass US exports."

The US announcement also comes after the United Steelworkers union asked US authorities to investigate Chinese subsidies to the green energy sector.

US officials denied that the timing of the announcement was politically motivated.

Chinese Premier Wen Jiabao is expected to meet Obama on the sidelines of a UN meeting in New York next week.

Wen will be in New York next week to attend both the annual UN General Assembly meeting and a special summit on the UN's Millennium Development Goals.

source AFP

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