US Takes China to the WTO over Financial Services and AD/CV Duties on Steel

September 15, 2010

On September 15, 2010, the U.S. Trade Representative (USTR) filed two new dispute settlement cases against China at the World Trade Organization (WTO).    The first case accuses China of granting its state-owned financial services a virtual monopoly over electronic payment services for credit and debit card companies by the exclusion of U.S. companies. The second case concerns issues relating to countervailing and antidumping duties (AD/CV) imposed by China on imports of grain oriented flat-rolled electrical steel (GOES) from the U.S.

According to the first complain, electronic payment services involve the ser service through which transactions involving credit card, debit card, charge card, check card, automated teller machine card, prepaid charge card or other similar card or money transmission product through which transfers of funds between institutions participating in the transaction are managed and facilitated. Specifically, the complaint alleges that China has failed to fulfill its promises made in its Schedule of Specific Commitments on Services annexed to the Protocol on the Accession of the People’s Republic of China. Despite these commitments, China UnionPay (CUP) is the only entity that China permits to supply electronic card payment services for transactions denominated in renminbi (RMB) in China.

The second complaint claims that China failed to live up to its obligations under the Agreement on Subsidies and Countervailing Measures (SCM Agreement), the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (AD Agreement) and the General Agreement on Tariffs and Trade (GATT) by initiating investigations without sufficient evidence, failing to objectively examine the evidence, failing to disclose essential facts underlying its conclusions, and failing to provide an adequate explanation of its calculations and legal conclusions.

Should the requests fail to resolve the matters described above and a dispute settlement panel is established, USTR expects that the WTO will issue reports on its findings and recommendations within nine months of each panel’s establishment. USTR is inviting written comments from the public on all issues raised by both complaints. To ensure consideration, all comments should be submitted by October 29, 2010.

Please contact a Barnes/Richardson attorney for information on how to submit comments.