China loses trade dispute over car parts

The World Trade Organization made public its first official condemnation of Chinese commercial practices Friday, releasing a February ruling that sided with the United States, the European Union and Canada in a dispute over car parts.

The verdict found that China was breaking trade rules by taxing imports of auto parts at the same rate as foreign-made finished cars.

The three-member WTO panel ruled against China on nearly every point of contention with the U.S., the 27-nation EU and Canada. The panel found that Chinese measures “accord imported auto parts less favorable treatment than like domestic auto parts” or “subject imported auto parts to an internal charge in excess of that applied to like domestic auto parts.”

Its final message to Beijing: “The dispute settlement body requests China to bring these inconsistent measures as listed above into conformity with its obligations.”

The three trade powers contended that the tariff was discouraging automakers from using imported car parts for the vehicles they assemble in China, costing Americans, Canadians and Europeans their jobs, they said.

China, which can still appeal, says the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars.