Automobile Parts Tariff: China versus WTO

Paper Summary:

This paper takes a look at the automobile parts conflict that China has with the World Trade Organization (WTO). The author explains each party's standing - China wanting to prevent tax evasion by companies who import whole cars as spare parts to avoid higher tax evasions and to protect their auto industry, and the WTO's viewpoint that China has violated WTO regulations by treating car parts as whole automobiles. The paper also mentions that the WTO is being pressured by the United States, Canada and the EU to force China into dropping their inflated tariff on automobile parts as this poses a threat to the automobile industry of the Western nations.

From the Paper:

"China's entry into the WTO on November 11, 2001, was pinnacle in the validation of the organization's presence as the universal mediator of international trade because it marked the entrance of the world's most populous nation. It opened the world market to China and Chinese consumers to the world, but also subjected the communist nation to comply with regulations decided predominantly by a panel of students to the laissez faire principle. This contradiction of China's trade policy before and after entry into the WTO has led to a major conflict between China and WTO in regards of a tariff being placed on automobile parts being imported into its borders. The existing problem-at-hand is that China is battling to secure their domestic automobile industry by retaining a high tariff on parts imported, while the WTO is receiving pressure from the EU, United States, and Canada, to force China into dropping their inflated tariff on such goods under the pretense that it violates WTO regulations."

Sample of Sources Used:

• "China's Auto Tariff Not Violating WTO Principles." China Daily 16 Feb. 2008. 6 Apr. 2008 <http://www.chinadaily.com.cn>.
• "China Offically Joins WTO." CNN. 22 Nov. 2001. 6 Apr. 2008 <http://www.cnn.com>.
• Klapper, Bradley S. "China is Improperly Taxing Car-Part Imports, WTO Rules."TheWashington Post. 14 Feb. 2008. 6 Apr. 2008 <http://www.washingtonpost.com>.

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• Essay # 38918 : "The Automobile Industry in China"

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