Importing spare parts management measures brought controversy

WTO dispute settlement body expert announced a ruling report on China, the USA and the European union and Canada auto parts dispute. Report indicates that China’s auto parts import management measures violate trade rules. Concerning this ruling, the State Ministry of Commerce showed a clear attitude that China does not fully agree with the contents of WTO Panel’s report and conclusions. And to remain the right of appeal that the WTO against China import tariffs on auto parts made by the adverse ruling.

Based on the regulation of the WTO, despite China possesses at least three months appeal period, but for the result, few truck industry people hold positive attitude towards satisfied result.

Triggered the dispute is an article named “auto parts import management approach (hereinafter referred to as “measures”), originally it was used intended to prevent some enterprises importing auto parts in the form of vehicle and refusing to pay tax by tax difference between vehicle and parts. Objectively speaking, in the past two years, it’s indeed met the original intention. From the above two aspects, the preliminary expected goal have been achieved. However, every coin has two sides, when the “measures” promote parts industrial upgrading and the expansion of export, accordingly, another trend arouses our concern.According to statistics from china Chamber of Commerce for importing and exporting of electromechanical products, export in the last year of 17.5 billion U.S. dollars worth of parts and components, topped wholly by foreign-owned enterprises, account for 29.5 % of total export.

In the process of implementation, the establishment refer to parts of wholly-owned by foreign investors in china has become increasingly evident. The “Chinese owed manufacturing power” crisis still exists. As to the long term delay, the dispute result is likely in vain. But the content is not simple as its surface.

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